Dear Clients,

As we enter 2026, we invite you to contact us for assistance in calculating your tax advances for the 2025 tax year. Please find several important updates below:

1. Income Tax Advances for 2025 Regarding Foreign Income

We strongly recommend that all clients with foreign income—such as investment portfolios, foreign rental income, LLCs, foreign pensions, and similar sources—contact us to perform an initial tax assessment for 2025 and pay the tax advance as soon as possible.

Clients who pay their 2025 tax liability early are entitled to an exemption from interest and linkage differentials as follows:

• Payment by the end of January: Full exemption (100%).
• Payment during February: 50% exemption from the two months of interest and linkage.
• Payment during March: 25% exemption from the three months of interest and linkage.
• Payment from April onwards: Full interest and linkage differentials will be added, calculated from the beginning of the year.

To perform this tax assessment, please send us your 2025 income forms (1099, K-1, rental income summaries, etc.) as soon as possible. Note that these documents are typically available during February. Alternatively, payment can be based on 2024 income levels, provided there has been no material change.

2. Tax Advances on Israeli Rental Income

For those receiving residential rental income exceeding approximately 5,700 NIS per month, it is recommended to pay a 10% tax advance via the following link: Israel Tax Authority – Payment Portal

For a more precise calculation or for tax advances on commercial rentals, please contact our office directly.

3. Tax Advances for Self-Employed Income

We recommend reviewing whether the periodic tax advances paid throughout 2025 are sufficient or if an additional one-time payment is advisable.

Furthermore, it is worth evaluating whether the 2025 tax assessment remains valid for your 2026 income projections. If necessary, we should update your status with the Income Tax Authority and National Insurance (Bituach Leumi) accordingly.

For further details and to conduct your tax assessments, please contact us at: Email: elad@hb-cpa.co.il