Natalie Alter
# Post 4
** Family company or limited company **
By working properly with the right professionals we can enjoy the benefits of sole taxation in real estate profits.
In the post we will talk about a family company, a limited company, where it meets us and most importantly – how you can save a lot of money.
So without further ado, let’s get started:
* ** Company Ltd. ** – Limited liability company. A company Ltd. may engage in any legal matter that it declares has arisen for this purpose, and it has a separation between the people who establish it and are its owners and its assets and accounts. A company can be private or public, listed on a stock exchange or a family company, but it is considered an economic legal entity in itself that obeys laws regarding the management of its funds and assets and payments and liabilities to suppliers and customers.
In short – the company is legally independent, and its owners enjoy a limitation of liability – it is not possible to tie the company’s debts to the company’s owners.
** Family Company Home Company ** – A family company is like a limited company, it operates according to the Companies Law, but the only difference between it and a regular limited company is in calculating the taxes paid to the income tax.
In terms of income tax, a family company is taxed as if it were an individual and not a limited company. Therefore the tax calculations are calculated according to the single taxation of the taxpayer representing the company.
On the face of it, it seems better to pay corporation tax of twenty-five percent over individual tax that can reach forty-eight percent of income. But a family company has a number of advantages and proper conduct will allow the company to enjoy the unique benefits and also take advantage of the protection afforded by a limited company.
There are conditions that must be met in order to register as a family company, the main ones being:
A company controlled by a maximum of five people.
2. A society in which the public has no real interest.
3. The company is required to hold one of the following assets – building, land, cash, shares of a home company.
** What are the benefits of a family company? **
While the distribution of dividends to shareholders in a regular limited company entails the payment of tax, the great advantage of a family company is that dividend distributions to the shareholders in the family company are exempt from tax payments.
If the representative taxpayer has several companies, some of which gain and some lose, it is possible to offset losses of one company from the profits of the other company. This method is common among contractors who set up a separate company for each construction project.
If the representative taxpayer has tax reliefs such as credit points due to a family with many children or due to disability and more, the whole family will be able to enjoy these credit points and the tax relief they provide.
If the representative taxpayer is an employee who owns a losing company, it is possible to offset the company’s losses against the income from the salary and receive tax refunds.
A family company is one of the “pipe companies”. A company defined as a family company gives its shareholders a unique status. The Company’s income will be attributed to each of the shareholders directly and will be taxed according to the marginal tax rate imposed on it. Allegedly, in most cases, the individual will prefer that the tax levied on the company’s income be according to the corporation tax, which is significantly lower than the maximum marginal tax imposed on individuals. However, basic tax planning (but one that is controversial in Gaza) would say that when a company makes a profit the shareholder will leave the company in its normal position. From the moment she loses, he will become a family company, deducting the loss from his personal income. It should be emphasized that no more for the taxpayer ie for the owner of the family company to offset losses at the personal level during the period in which the company was normal, the company will be able to offset the losses only against future profits.
** How can a family or home company help me save tax? **
I bring you back to one of the previous posts which explained that income tax allows a company to be viewed and only for the purpose of offsetting the tax.
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