"In its discussion of the income tax appeal, the court sits not only as an adjudicator between the two parties, as in a civil appeal, but by filing the appeal, the door is opened for further examination of the assessment made by the tax assessor, and the court has a duty not only vis-à-vis the appellant debtor, but also with the entire public, which has an interest in the assessment being a true assessment." (See: Civil Appeal 495/63 Malkov v. Tax Assessor, Tel Aviv, IsrSC 18(2) 683, 686D (1964) (hereinafter: the Malkov case)).
- However, the discretion given to the trial court in such a case is his own, and not mine. The trial court exercised this discretion in a substantive manner, and therefore - despite the doubt I raised - I will not step into its shoes.
- Moreover, in the test of the result, the conclusion I reached regarding the entitlement of the Kiryat Shmona municipal players to the benefit of a better settlement in any case makes the team's grievances in this context redundant. The discussion of the group's grievance regarding the non-granting of the agreed extension in the context of the financing of housing and accommodation as a benefit that the employer gives to its employees, is also redundant. As I have already noted, after we have learned that the players of the Ironi Kiryat Shmona have determined their center of life in this city, and thus were entitled to the benefit of a beneficiary settlement, inter alia, by virtue of the housing and accommodation in the city that were financed from the team's funds, we are forced to reach the conclusion that this funding is a "benefit from an employer", for which the players should be taxed as a testator in section 2(2)(a) of the Income Tax
Beneficiary Settlement Benefit
The meaning of the term "center of his life" for the purpose of Section 11 of the Income Tax Ordinance
- Section 11 of the Income Tax Ordinance, entitled "Tax Benefits in Localities", grants various tax benefits to residents of localities that are eligible for this, which include border localities such as the city of Kiryat Shmona. According to the provisions of the section, "a resident ... in a particular locality" is "an individual whose center of life is in that locality" (see: section 11(a) of the Ordinance). The question that we must discuss and decide is this: How do we examine where is the "center of life" of a person for the purposes of section 11(a) of the Ordinance? Further to this question, I will discuss the question of the relationship between the definition of "resident in a particular locality" - as stated in section 11(a) of the Ordinance - and the definition of "resident or resident of Israel" in section 1 of the Ordinance, which serves as a general definition of residency.
- Similar to the definition of "resident in a particular locality" in section 11(a) of the Income Tax Ordinance, section 1 of the Ordinance - which is the general definitions section - defines an "Israeli resident" or "resident" as "a person whose center of life is in Israel." In view of this similarity, Justice S. Jubran examined other municipal applications 8234/11 Baltinsky v. Acre Tax Assessor [published in Nevo] (February 6, 2014) (hereinafter: the Baltinsky case) the question of residency for the purpose of section 11 of the Ordinance, in accordance with the definition of "resident of Israel" stated in section 1 of the Ordinance (I will note that in the Baltinsky case No discussion was held on the question of the relationship between the definition of "resident of a particular locality" and the definition of "resident of Israel" (see: ibid., paragraph 15)).
- Sections 1 and 11 of the Income Tax Ordinance use the same expression as "resident". However, in my opinion, the "residents" to whom section 1 of the Ordinance speaks are not identical to the "residents" to which section 11 is referred . In this context, the words of Justice Hayut, who were made in other municipal applications 477/02 Gonen v. Haifa Tax Assessor [published in Nevo] (December 29, 2005) regarding the term "resident" in fiscal legislation are appropriate:
"These definitions relating to fiscal residency are not necessarily interpreted in accordance with the interpretation given to the term 'resident' insofar as it appears in other laws and in other contexts. The rule in this matter is that although legislative harmony should be strived for, a term that appears in different statutes should not be interpreted with "blind" uniformity except with regard to the content of the law and its general intent, and this may lead to different interpretations and different meanings that will be given to the same term in each of those legislations" (see ibid., paragraph 8; See also the references to Shem; Emphasis added - A.S.).
- In our case, what is stated in the definition of "resident or resident of Israel", which appears in section 1 of the Income Tax Ordinance, can assist in the interpretation of the definition of "resident in a particular locality" in section 11 of the Ordinance, but, as stated, there is no overlap between these two definitions. I mean that the test of the "center of life" will be applied differently within the framework of section 1 of the Ordinance, on the one hand, and within the framework of section 11 of the Ordinance, on the other; so that it is possible that under the same circumstances a particular person will be defined as a "resident of Israel" for general tax purposes, but not as a "resident of a particular locality" for the purpose of the benefit under section 11 of the Ordinance - And vice versa. This difference stems from the difference between "resident of Israel" for the general fiscal residency of the taxpayer, and "resident of a particular locality" with respect to a person's entitlement to a tax benefit for his residence in a frontier locality or in another beneficiary locality.
- I will elaborate on my position.
- First, as usual, I will turn to the language of the Income Tax Ordinance. Section 1 of the Ordinance defines "Israeli resident" or "resident" as follows:
“)a) With respect to an individual - a person whose center of life is in Israel; In this regard, the following provisions will apply: