kýklos

Israeli tax engine

We don't translate. We localize.

Most planning tools treat Israeli tax as an edge case. We treat it as the product. Here's exactly what we model — and what we don't.

Section 102

The equity comp regime, modeled per grant.

Trustee route — capital gains track

A grant assigned to a trustee under the capital gains track is taxed at 25% on the gain measured from the grant date FMV — provided the 24-month holding period is satisfied. We track the trust release date per grant and surface it on the dashboard.

  • 24-month holding period from deposit with trustee
  • Capital gains rate of 25% on the appreciation over grant FMV
  • Ordinary income tax on the grant FMV (employment income)

Trustee route — ordinary income track

Less common, but still encountered. Full appreciation taxed as ordinary income at the marginal rate, reported via payroll, with employer entitled to a deduction.

  • All appreciation taxed at marginal rate
  • Employer receives corresponding deduction
  • Used selectively — we flag whenever your data implies this track

Non-trustee route

Granted directly without a trustee. Taxed entirely as ordinary income at exercise/vesting. We separate non-trustee grants visually so you can see the tax-base difference at a glance.

  • Ordinary income at exercise or vesting
  • No 24-month preferential treatment
  • Common in early-stage startup grants

Real estate

Mas Shevah, by the formula.

The most overlooked cost in Israeli property planning. We compute it per property, every quarter.

Linear allocation method

For properties acquired before January 2014, the gain is split: pre-2014 gain at the historic effective rate, post-2014 gain at the current rate (typically 25% for individuals).

  • Tax = gain × (post-Jan-2014 days ÷ total holding days) × applicable rate
  • Pre-2014 portion at historic effective rate per individual circumstances
  • Adjusted acquisition price (linkage / מדד adjustments) included

Single-apartment exemption (דירת מגורים מזכה)

Properties potentially eligible for the single-apartment exemption are flagged with a soft warning — we never apply it automatically, since eligibility depends on facts only you know.

  • Holding period and prior-residence checks
  • Family-unit consideration (ב"כ משפחתי)
  • Cap thresholds tracked against current law

Betterment levy (היטל השבחה)

Where local committee plans (תוכנית מתאר) have increased the property's potential value, the betterment levy can apply at sale. We surface this as exposure, not as a hard number.

  • 50% of the betterment value at the time of realization
  • Triggered on sale or development
  • Local-authority dependent — we mark estimates clearly

Crypto

ITA's position, fully respected.

Capital asset, 25% rate

ITA has consistently treated crypto as a capital asset, not a currency. Individual gains are taxed at 25% (subject to surtaxes for high earners). We compute the unrealized gain per holding using FIFO cost basis.

  • FIFO cost basis (configurable to specific-lot)
  • Per-asset unrealized gain in ILS
  • High-earner surtax flag where applicable

Cost basis preservation

The single hardest thing for crypto heirs is reconstructing cost basis. We preserve every entry — manual or API-imported — with the timestamp, source, and FMV at acquisition.

  • Per-acquisition cost basis records
  • Bank of Israel daily USD/ILS rate
  • Read-only exchange API connections (no withdrawal scope)

What this is, and what it isn't.

kýklos computes estimates based on publicly known Israeli tax rules and the data you provide. It is a planning tool, not a tax opinion. Every figure is labeled as an estimate. For consequential decisions — selling a property, restructuring ownership, executing a will — consult a licensed Israeli tax advisor or attorney.

We update the engine when laws change. We do not lobby, advise, or front-run.