Your Taxes: Two permanent homes and a double life? Problematic

An Israeli District Court has determined that an individual maintaining dual residences and significant business interests in both Israel and Nigeria was, in fact, an Israeli resident for tax purposes. The ruling, stemming from the case of Chaim & Yona Zach vs Large Enterprises Assessing Officer, underscores the detailed examination required to establish an individual's center of living.

The taxpayer, born in Israel in 1948, relocated to England in 1985 and then to Nigeria in 1993, where he established successful agricultural and chicken-breeding companies. He maintained a home in Nigeria and another in Israel. For the tax years 2009-2017, he filed returns claiming no income and asserting foreign residency. However, the Israel Tax Authority (ITA) contested this, asserting his liability for Israeli taxes on his worldwide income.

Israeli tax law defines a resident as someone whose center of living is in Israel, considering family, economic, and social ties. A rebuttable presumption of residency applies if an individual spends at least 183 days in Israel annually or 425 days over three years, including 30 days in the last year. The court found the taxpayer exceeded these day thresholds significantly.

Crucially, the court ruled the taxpayer failed to rebut the presumption of residency. His frequent visits to Israel, often exceeding half of each month, were a key factor. While he had a permanent home abroad and a Nigerian residency permit, the court noted this was insufficient to establish foreign residency. Furthermore, he and his wife jointly owned two houses in Israel, and no evidence suggested she refused to live with him. His statement to Acres Africa magazine, calling Nigeria "practically my second home," implicitly acknowledged Israel as his primary residence.