Extracts From Arrangements Bill

TV tax to increase 5% a year; easier exit from cellular contracts.

TV tax to increase 5% a year

Once upon a time there had been talk of abolishing television tax (the agra ). Now the talk is that it will increase by 5% in each of the years 2011 and 2012, then gradually shrink until disappearing altogether in 2025 - but only if new collective employment agreements can be signed with the Israel Broadcasting Authority employees. Right now it costs NIS 390 a year to own a television. In 2011 that will rise to NIS 410. The tax on a car radio will increase even more, by 20% in each of the two next years: This year the radio tax was NIS 120, and next year it will be NIS 144. (Ophir Bar-Zohar )

Easier exit from cellular contracts

The Economic Arrangements bill for 2011-2012 sets a limit on how much the mobile operators can fine customers for breaking contract: up to 10% of the user's average bill times the number of months until the contract ends. A customer who walks out in the middle of his contract, according to the the bill, may continue to make payments on a phone bought based on monthly installments instead of having to pay the entire outstanding amount at once. The bill also frees importers to bring in mobile phones as long as the devices comply with accepted international standards. (Amitai Ziv )

Your city will know what you make

Local authorities will be entitled to receive information from the Tax Authority regarding the income of any resident seeking a discount on city tax (arnona ). Also, any resident seeking income tax breaks, in for instance one of the 180 peripheral towns where residents are eligible for such breaks, will first have to prove that he's paid all his arnona bills. (Moti Bassok )

No tax on scholarships

The Economic Arrangements bill contains an amendment that exempts scholarships for higher education from income tax. The break also applies to research grants given to students during their studies. But it only applies, in both cases, to grants issued by the institute where the student studies, not to grants given by other bodies. (Moti Bassok )

VAT on land sold to purchasing groups

A set of amendments aims to discourage activity by purchasing groups which have been taking advantages of loopholes in the law to avoid tax by buying residences in bulk. One amendment requires anybody selling land to a purchasing group to pay value-added tax on the transaction. A transaction selling land to a purchasing group will only come into force, says the amendment, after confirmation from the VAT authority that the tax had been paid. Alternatively, the seller may present a valid guarantee that the VAT will be paid on time. The amendment thus discourages not the purchasing group per se, but anybody intending to sell land to purchasing groups. ( )