Case (3)Case (3):: Mr. Marwan work as manager for a company Mr. Marwan work as manager for a company withwith::

- -monthly salary 9000 NIS and hasmonthly salary 9000 NIS and has, , - -additional bonus of career 1500additional bonus of career 1500,,

- -additional bonus of high cost of living 750 additional bonus of high cost of living 750 andand,,

- -additional bonus of travel 250additional bonus of travel 250..

RequiredRequired:: 11 . .Calculate the income tax if you know that Calculate the income tax if you know that

he is married and has 2 sons, One of he is married and has 2 sons, One of them study in Palestine universitythem study in Palestine university..NoteNote::

- - The exchange rate for dollar 5 NISThe exchange rate for dollar 5 NIS.. - - Marwan work in private company so bonus Marwan work in private company so bonus

for travel included with income taxfor travel included with income tax..

AnswerAnswer::

Base salary 9000Base salary 9000additional additional Bonus of career 1500Bonus of career 1500additional additional bonus of high cost of living bonus of high cost of living 750750additional additional bonus of travel 250bonus of travel 250Total salary 11500 *12/5= 27600$Total salary 11500 *12/5= 27600$ExemptionExemption::Resident = 3000Resident = 3000Wife = 500Wife = 500

Sons 500= 500*1Sons 500= 500*1Student (university) 2500Student (university) 2500Total of exemption = 6500$Total of exemption = 6500$

Taxable income 27600- 6500= 21100$Taxable income 27600- 6500= 21100$1000010000**8%8% = =80080060006000**12%12%==72072051005100**16%16% = =816816

Annual income tax = 800+720+816=2336Annual income tax = 800+720+816=2336Monthly income tax= 2336/12=194.6$Monthly income tax= 2336/12=194.6$

194.6194.6**55==973973 NISNISSalary after income tax = 11500-973=10527 Salary after income tax = 11500-973=10527 NISNIS

Important noteImportant note::

Tax evasionTax evasion

Tax avoidanceTax avoidance

What is the main difference between themWhat is the main difference between them??

Tax evasionTax evasion is illegal work and that stands by is illegal work and that stands by offering wrong information and false documents offering wrong information and false documents to pay less payment of the accrued taxto pay less payment of the accrued tax..

Tax avoidanceTax avoidance is legal work by following the is legal work by following the procedures of income tax law and get the best procedures of income tax law and get the best and largest of deductions and exemptions by and largest of deductions and exemptions by searching for the way that make the tax payment searching for the way that make the tax payment very littlevery little..

it is important to say that tax avoidance it is important to say that tax avoidance is accepted by the tax officer to prevent is accepted by the tax officer to prevent illegal tax evasionillegal tax evasion..

To reach the tax avoidance which is legal To reach the tax avoidance which is legal operation, every taxpayer should be operation, every taxpayer should be think about the way and the most think about the way and the most suitable condition for the project typesuitable condition for the project type

Trading or service or industrial projectTrading or service or industrial project , , ..…..…

Every type has different way for making Every type has different way for making the best legal tax avoidancethe best legal tax avoidance..

Look intoLook into

Article No:6 & 7Article No:6 & 7

Case (4)Case (4):: Mr. Jehad work in the Investment Bank with Mr. Jehad work in the Investment Bank with monthly monthly base salarybase salary 309$ and additional 309$ and additional bonus of high cost of living amounted 80% bonus of high cost of living amounted 80% of base salary. and additional bonus for cash of base salary. and additional bonus for cash risk 25.7$ monthlyrisk 25.7$ monthly..

If you know that his contribution of saving If you know that his contribution of saving box with 5% of base salary. And social box with 5% of base salary. And social security contribution (pension) 32.02$. Mr. security contribution (pension) 32.02$. Mr. Jehad get 14 salaries yearly (banking Jehad get 14 salaries yearly (banking system)system)Required: calculate the income tax in caseRequired: calculate the income tax in case

11 - -singlesingle..22( -( -married + 4married + 4 ) )and additional income from part and additional income from part

time work 200$ for 6 months annuallytime work 200$ for 6 months annually..

Answer: case 1Answer: case 1

Base salary = 309$Base salary = 309$

+ +additional bounce of high cost of living =(309*80%)= additional bounce of high cost of living =(309*80%)= 247.2$247.2$

+ +additional bounce for cash risk = 25.7$additional bounce for cash risk = 25.7$

total monthly salary = total monthly salary = 581.9$581.9$

Deduct nontaxable incomeDeduct nontaxable income

saving box =15.45$saving box =15.45$

social security contribution (pension) =32.02$social security contribution (pension) =32.02$

Total of nontaxable income = Total of nontaxable income = 47.4747.47

Net income (Monthly) = Net income (Monthly) = 534.43534.43

Annual net income =534.43*14= Annual net income =534.43*14= 7482.027482.02$$

Deduct the exemptionDeduct the exemption

Resident = 3000Resident = 3000

Net taxable income = 4482.02 * 8% = Net taxable income = 4482.02 * 8% = 358.56$358.56$

Monthly income tax 358.56 / 12 = Monthly income tax 358.56 / 12 = 29.8829.88$$

Answer: case 2Answer: case 2Base salary = 309$Base salary = 309$

+ +addition high cost of living =(309*80%)= 247.2$addition high cost of living =(309*80%)= 247.2$ + +addition for cash risk = 25.7$addition for cash risk = 25.7$ total monthly salary = total monthly salary = 581.9$581.9$

Deduct nontaxable incomeDeduct nontaxable incomesaving box =15.45$saving box =15.45$social security contribution (pension) =32.02$social security contribution (pension) =32.02$Total of nontaxable income = Total of nontaxable income = 47.4747.47

Net income (Monthly) = 534.43Net income (Monthly) = 534.43Annual net income =534.43*14= 7482.02$ + Annual net income =534.43*14= 7482.02$ + ( 200$*6)=8682.02( 200$*6)=8682.02Deduct the exemptionDeduct the exemptionResident =3000Resident =3000Wife = 500Wife = 500Sons (500*4) = 2000Sons (500*4) = 2000 Net taxable income = 3182.02*8% = 254.56$Net taxable income = 3182.02*8% = 254.56$

Monthly income tax = 254.56 / 12 = 21.21$Monthly income tax = 254.56 / 12 = 21.21$