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Foreign Currency
For years, an oversight regime on foreign currency existed in Israel, and there were many limitations on foreign currency transactions.
On Independence Day in the state’s 50th anniversary, the oversight regime was annulled and foreign currency was liberalized.
The Bank of Israel permitted the free purchase and sale of foreign currency.
Likewise, it permitted bringing funds to and removing funds from Israel, without limitations.
Management of Foreign Currency Accounts
Background
Management of foreign currency accounts by customer account type
| Type of Account/Customer | Background | Source of Funds | Taxation |
|---|---|---|---|
| Individual Tax Exemption - A foreign currency deposit for individual residents of Israel. | A foreign currency account intended for all clients who are Israeli residents but not corporations. If you are a foreign resident, you can use it to manage checking accounts and/or deposits in a variety of currencies. | Transfers of foreign currency From Israel or abroad, or purchases from Israeli currency. |
Income tax withholding is due on the interest at the source. |
| Corporate Tax Exemption - Foreign currency deposit for corporations and Israeli residents. This can be used to manage checking accounts and/or deposits in various currencies. |
This foreign currency account is intended for customers who are Israeli residents and defined as corporations. This account can be used to manage checking accounts and/or deposits in a variety of currencies. | Foreign currency transfers from Israel or abroad, or purchases from Israeli currency. | Income tax withholding is due on the interest at the source. |
| Reparation Tax Exemption - Reparations Deposit in Foreign Currency. | A reparations account in foreign currency is intended for clients who receive reparations as victims of the Nazis. You can use it to manage checking accounts and/or deposits in a variety of currencies. | Reparations for victims of the Nazis. | The interest is exempt from tax withholding. |
| Tax Exemption for New Immigrants - a deposit in foreign currency for new immigrants. | This foreign currency account is intended for new immigrants who are exempt from paying income tax on the interest from the account in specific cases. If you are a new immigrant, you can use it to manage checking accounts and/or deposits in a variety of currencies. | Transfers of foreign currency from overseas (allowable with a declaration that these funds were in your possession outside of Israel before you immigrated.) | The interest is exempt from tax withholding (in cases defined by the law). |
| Tax Exemption for Returning Residents - A deposit in foreign currency for returning residents. | This foreign currency account is intended for returning residents/senior returning residents who are exempt from paying income tax on the interest from the account in specific cases. If you are a returning resident, you can use it to manage checking accounts and/or deposits in a variety of currencies. | Transfers of foreign currency from overseas (allowable with a declaration that these funds were in your possession outside of Israel before you returned to the country.) | The interest is exempt from income tax withholding (in cases defined by the law). |
| Tax Exemption for Foreign Residents | If you are a foreign resident, you can use it to manage checking accounts and/or deposits in a variety of currencies. | The interest is exempt from income tax withholding with a declaration. |
*This is all contingent on bank policies.
*For additional, complete details, contact a branch.