In civil appeal 476/17, Amit Amishvili Rafi v. Assessing Officer Tel Aviv 4, the Israeli Supreme Court upheld the ITA's position to classify the taxpayer as an Israeli resident despite staying only 30 days (!) in Israel in the 2007 tax year and to tax his income from gambling generated outside of Israel.

The Appellant was an Israeli citizen, single, whose family lives in Israel. From 2002 until 2009, the Appellant stayed alternately in Israel and abroad, while being exposed to the poker game and began to participate in foreign poker competitions abroad making fair profits over the years. The focus of the judgment was in the 2007 tax year, during which the Appellant stayed in Israel for 30 days. The court accepted the assessing officer's claim that the appellant was an Israeli resident in that year, according to the "center of life" test, and therefore his income derived abroad in that year should be taxed in Israel.

The court leaves open the question of whether a person may be a foreign resident for the purposes of domestic law in Israel, and yet not be defined as a resident for tax purposes in any other country in the world. In our opinion, such a situation is certainly possible, since the absence of such person for a significant period of time in a particular country, the absence of a permanent home in that state or the existence of a number of permanent homes alongside the deployment of assets, businesses and perhaps personal family around the world leads to the conclusion that the person is not Resident in a particular country. The "default" set forth in the judgment that if a person does not show that he is a resident of a foreign country for tax purposes it makes Israel the state of his residence for tax purposes, is not anchored in either domestic law or any treaty. Even the thesis of the prevention of "double non-taxation" does not, in my opinion, justify a situation in which that person who is not a resident of any country, does not enjoy the public services of any country and does not meet the residency tests in domestic law and the relevant treaty is taxed on his worldwide income in the default residence country.

Furthermore, in my opinion, a balanced examination of the judgment will lead to a conclusion that in the court's determination there is a service to foreign residents who do not wish to be taxed in Israel as well as gamblers who want to share with the tax authority losses.

Postponement of the date of the start of the Israeli residency period

Since we believe that according to the same tests, it may determine that a taxpayer is not a resident of Israel, but a resident of his foreign country, we chose to bring the words of Justice Mazuz (from the Israeli Supreme Court), but when we change "Israel" to a "foreign state" And its implications:

A person who is a citizen and resident of a foreign country - and especially a person who was born and raised in a foreign country - and leaves to Israel, the starting point is that he remains a resident of the foreign country, even if he stays in Israel for long periods of time, as long as there are no clear indications of his intention to sever the residency to the foreign state and to establish a place of residence in Israel, such as by giving up citizenship, selling his home and assets in the foreign country, establishing a home and family, and a place of occupation in Israel, while severing his affinity from the foreign state. The very fact of being in Israel for extended periods of time does not necessarily indicate a severance of the residency relationship with the foreign state. In the current global reality, the phenomenon of prolonged stay abroad for various purposes, such as for academic study purposes, for work purposes (usually in international companies), for the purposes of a state mission or commercial representation, is used for participation in sports tournaments or art in various fields. Such stay in Israel does not necessarily indicate an intention to sever the residency relationship to the foreign state in the absence of a clear indication of such action.

The above is especially true in a case such as ours, in which the Appellant was born and raised in a foreign country, where his family is located, and he has no permanent home in Israel. The Appellant did not establish a home and family and did not strike roots in Israel, but spent time in Israel for the purposes of his professional occupation. The petitioner traveled with a foreign passport to the various countries and received a residence visa as a foreign citizen. The Appellant did not acquire Israeli citizenship and was not recognized as a resident, nor opened a tax file in Israel, nor reported his income to the Israeli tax authorities. On the other hand, the Appellant maintained his affinities to the foreign country in which his family was located, spent five months on average in the foreign country and transferred money that he had earned in Israel to the foreign state.

The manner in which the prescribed law presents the residency tests, and allows a person who has been in the country of origin only 30 days to be considered a resident of that country means that it is possible to "postpone" the date of becoming a resident of Israel. If we wish to adopt the outcome of the judgment in its entirety, it is sufficient that the foreign resident who wishes to postpone the date of recognition as a resident of Israel will remain in his country of origin 30 days a year or less, as Mr. Amshikashvili did in Israel, and this is enough to define him as a Israeli resident.

Most immigrants to Israel do not give up citizenship in their country of origin. The sale of the house and assets in the foreign country may take years. When it comes to single men, the parents are usually located in the country of origin. All that we need is that there should be no severance of initiated affinities from the foreign country. From the moment that the evidence of the court's decision that the very fact that the person stayed for extended periods of time in Israel almost to the end of the year does not necessarily indicate the severance of the residency relationship to the foreign country, it may be indirectly levied for several years of taxation in Israel, beyond the tax benefit granted to a person who became a returning resident for the first time And returning resident.

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