Tax Authority Chief Advises Students Against Marriage for Tax Benefits
Translated & summarized from Ice by baba
Shai Aharonovich, Director of the Tax Authority, advised students against marriage for tax reasons, suggesting that being a "public couple" offers more benefits. He called for separating spousal tax regulations from the Income Tax Ordinance, arguing the current system treats married couples as an outdated single economic unit. While married couples can sometimes calculate income separately, certain income types and business partnerships are still subject to joint calculations, unlike "public couples" who may have more flexibility.
The story in 6 lines · by baba
- Tax Authority Director Shai Aharonovich advised students not to marry due to tax disadvantages.
- Aharonovich suggested that being a "public couple" offers more tax advantages than being married.
- He called for separating spousal regulations from the Income Tax Ordinance.
- The current tax system often treats married couples as a single economic unit.
- Income from investments and assets may still be calculated jointly for married couples.
- "Public couples" are not automatically subject to all tax rules applied to married couples.
Shai Aharonovich, the Director of the Tax Authority, stated on Monday at a tax authority conference in Eilat that married couples should consider the tax implications of their marital status. He suggested that it would be preferable for tax purposes to be recognized as a "public couple" (known in the public) rather than being married. Aharonovich recalled advising students he taught for many years, who were at the age of deciding to marry, "not to get married" because being recognized as a public couple offers tax advantages.
Aharonovich called for the separation of spousal regulations from the Income Tax Ordinance, arguing that the current system, which often treats married couples as a single economic unit, is outdated. He noted that income from personal labor is already calculated separately for each spouse, and other aspects of the tax code need reform. "We are not in the days of the founding of the state," he remarked, indicating the need for modernization.
The issue stems from old Income Tax Ordinance provisions that consider married couples as one entity for tax purposes. While Section 65 of the ordinance designates one spouse as the "registered spouse" responsible for tax, Section 66 allows for separate tax calculations on employment and business income under certain conditions. However, income not derived from work, such as certain investment or asset income, may still be calculated jointly. Unlike married couples, "public couples" are not automatically subject to all the same tax rules, potentially granting them advantages in specific situations, though their status is not universally superior in all tax matters.