Worthy ruling (illustration)
Photo: Index Open
Childcare expenses to be tax-deductible
Supreme Court reaffirms Tel Aviv District Court ruling saying payments going towards nannies, daycare and preschools can be recognized as deductible expenditures for tax purposes
The Supreme Court on Thursday ruled that childcare expenditures could be recognized for tax purposes, thus rejecting the State's appeal on a similar ruling made a year ago.
According to the ruling, 100% of childcare expenses going towards private nannies can be tax-deductible, as well as 63% of daycare and preschool expenses.
In April 2008, the Tel Aviv District Court ruled that childcare expenses would be considered deductible expenditures for tax purposes.
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The ruling, which formed a legal precedent, was given as part of a case in which a woman, working as an independent attorney, asked the Tax Authority to recognized daycare expenses paid to her two children's kindergartens, as deductibles.
The district tax assessor refused her request, and she chose to appeal the decision in court. Once the Tel Aviv District Court ruled in her favor, the State chose to appeal the ruling to the Supreme Court.
Thursday's five-judge panel ruled that expenses going towards childcare were, in fact, deductible expenditures, saying that the original court ruling "was a worthy one and therefore must not be tampered with."
The legislator – the Knesset – could chose to stipulate otherwise, but since it has not done so it was up to the court to decide on the matter. "It is up to the legislator to change, or form new norms in the matter," said the ruling.
Attorney Yuri Guy-Ron, chairman of the Israel Bar Association, welcomed the court's decision: "This is a brave, worthy ruling, both by the District and Supreme courts, one that is a significant step in recognizing the equality of man and women in Israeli society. It will go a long way towards integrating women in the workforce."
