Resident and Non-resident Companies
Israeli resident companies are subject to tax on worldwide profits and gains, with credit granted for overseas taxes in certain countries. A non-resident company is subject to tax only on Israeli-source profits, which includes, inter alia, income deriving from a permanent Israeli establishment or income accrued and produced in Israel.
Since January 2020, the corporate income tax in Israel is 23%. It is important to note that certain companies are eligible to lower corporate income tax rates. For example, Special Priority Enterprises and Priority Enterprises benefit from a lower corporate income tax rate ranging from 5% to 16% (depending on their exact location and definition by the Israeli Law for the Encouragement of Capital Investment).