Can I offset capital losses against capital gains on my Israeli tax return?

Israeli capital gains tax applies to the real gain on securities, property, and other capital assets, and Section 92 provides the mirror rule for losses. In the year of the loss, it is first offset against capital gains from any asset, and any remaining current-year loss can be applied against interest and dividends taxed at up to the same rate. Unused losses do not expire; they roll forward and reduce capital gains in future years without a time limit. There is an ordering rule: a loss arising outside Israel is set first against gains arising outside Israel. Our guide to capital gains tax in Israel explains how the underlying gain is calculated.

For an investor who files in Israel, the practical trap is that a loss is only preserved if you declare it. A foreign broker will not report to the Israel Tax Authority, so you must include the loss on your annual return, and keep the trade confirmations, to bank it for future years. Losses cannot be pushed backward into earlier years or set against salary; they work only against capital gains and, in the year of the loss, certain investment income. Married couples generally compute gains and losses separately unless they elect otherwise. If you are a new immigrant with exempt foreign gains, the loss rules interact with your residency status, so confirm which gains are even within the Israeli net before relying on an offset.

From the full guide: Capital Gains Tax in Israel for Non-Residents

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