## Taxable Expenses for Businesses in Israel

In Israel, businesses can deduct a variety of expenses from their income to reduce their taxable income. This article will provide a general overview of taxable expenses for businesses in Israel. It’s important to note that this is not an exhaustive list and specific regulations may apply to your business.

**General Rules for Taxable Expenses**

* **Wholly and Exclusively for Business:** The expense must be incurred wholly and exclusively for the purpose of generating income for the business.

* **Supported by Documentation:** Businesses must maintain records and receipts to support all claimed deductions.

**Common Taxable Expenses**

* **Employee Costs:** Salaries, wages, bonuses, social security contributions, and pension plan contributions.

* **Rent and Utilities:** Rent for office space, utilities, and internet costs.

* **Office Supplies and Equipment:** Stationery, computers, software, and office furniture.

* **Marketing and Advertising:** Costs associated with marketing campaigns, advertising materials, and website development.

* **Professional Fees:** Fees paid to accountants, lawyers, consultants, and other professionals.

* **Travel and Entertainment:** Travel expenses for business trips, meals with clients, and business entertainment (with limitations).

* **Interest Expense:** Interest paid on business loans.

* **Depreciation:** The gradual decrease in the value of tangible assets like machinery and equipment.

* **Research and Development (R&D) Costs:** Expenses related to developing new products or processes.

**Partial Deductions and Non-Deductible Expenses**

Some expenses may only be partially deductible, such as car expenses and cellphone bills used for both business and personal purposes. Other expenses, like fines and penalties, are generally not deductible.

**Keeping Records**

It’s crucial to maintain accurate and detailed records of all business expenses. This includes receipts, invoices, and bank statements. These records will be necessary to support your tax deductions if audited by the Israel Tax Authority.

**Consulting a Tax Professional**

The Israeli tax code can be complex. Consulting with a tax professional can help you ensure you are claiming all the deductions you’re entitled to and avoid any potential tax liabilities.

**Disclaimer**

This article provides general information only and shouldn’t be considered tax advice. Always consult with a qualified tax professional for personalized advice regarding your specific business situation.