Capital losses on securities incurred during the current tax year can be offset against actual capital gains in the same year. This is in accordance with Section 92 of the Income Tax Ordinance.
In addition to offsetting against capital gains, capital losses resulting from the sale of Israeli securities can also be offset against interest or dividends from the same security.
Furthermore, these losses can be offset against interest or dividends from other securities, as long as the tax rate applicable to such interest or dividends does not exceed 25%.
If a loss cannot be fully or partially offset in the tax year it is incurred, it may be offset against capital gains in subsequent tax years. This offsetting should be done in chronological order.
However, it is important to note that a tax return for the tax year in which the loss was incurred must be filed with the tax authority in order to offset the loss in subsequent years.
If the loss is from the sale of an asset outside of Israel, it shall be offset initially against capital gains from the sale of assets outside of Israel.
In cases where tax is deducted in an amount that exceeds your tax liability during the computation of your capital gains income, you may request a tax refund from the tax authority in your area of residence.
