A significant tax benefit for retirees and those planning to retire in the coming years.
Amendment 190 to the Israeli Income Tax Ordinance offers a significant financial benefit, primarily to retirees but also to those planning to retire in the coming years. The amendment was designed to encourage saving for later life, and it offers substantial benefits on funds deposited into a Provident Fund (Kupat Gemel), an Israeli long-term savings vehicle.
Under Amendment 190, retirees can open a Provident Fund that invests in the capital markets at a reduced tax rate. They can withdraw their money at any time without restriction, and they can pass the entire portfolio on to their heirs.
Amendment 190 was introduced to address a long standing problem. Since January 2008, Provident Funds had lost much of their appeal as a savings vehicle. The amendment restores that appeal, allowing retirees to invest through a Provident Fund in the capital markets, with full access to their savings and easy withdrawals whenever they need them.
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