In this insightful interview on Globes, tax lawyer Doron Levy breaks down the complexities of residency status and what it means for Israeli taxpayers: “The territorial method focuses on the relationship between the income and the country. If income is generated within a country’s borders, or received within its borders, that country has the right to tax it. This approach is straightforward because it ties tax liability to the physical location where the income is produced or received”.
“On the other hand, the personal method examines the relationship between the taxpayer and the country. This method taxes individuals or corporations based on their connections to the country, such as residency or citizenship, on a worldwide basis, regardless of where the income is generated”.
