Court: Gaza resident who won Israeli lottery must pay taxes

After hitting the $13 million jackpot in a 2015 lottery draw, Palestinian unsuccessfully appeals decision to deduct 30% off his winnings

Lital Dubrovitzky|
An Israeli court ruled on Tuesday that a Palestinian resident of the Gaza Strip who won an Israel lottery will have to pay taxes for his winnings.
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  • The lucky winner participated in the WINNER16 lottery in 2015 and hit the NIS 45 million ($13 million) jackpot, from which 30% was deducted according to the Israeli tax code as lottery winnings are considered taxable income.
    2 View gallery
    The Jerusalem County Court
    The Jerusalem County Court
    The Jerusalem District Court
    The man appealed the move to the Israel Tax Authority (ITA), claiming that since he wasn't a resident or citizen of Israel, Israeli taxation laws did not apply to him.
    The ITA rejected his claims and imposed another 2% surtax on him that was originally left out of the calculations.
    He filed another appeal with the Jerusalem District Court, represented by Adv. Tareq Bashir.
    In his appeal, the man claimed that imposing levies on him for income makes no sense since he's neither an Israeli citizen nor does he operate any businesses within the State of Israel.
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    בעיצומו של הסגר השלישי, הגרלות מפעל הפיס ממשיכות כרגיל
    בעיצומו של הסגר השלישי, הגרלות מפעל הפיס ממשיכות כרגיל
    Lottery station in a kiosk
    (Photo: Asaf Kamar)
    To justify his claims, he referenced the 1994 Paris Protocol, which stipulates that Israel can only tax Palestinians over economic activity conducted in Israel, and that 75% of taxes deducted should be transferred to the Palestinian Authority.
    Presiding Judge Avigdor Dorot rejected that rationalization, saying the Paris Protocol was irrelevant to the case and that the man contradicted himself by claiming, on one hand, that he was not subject to Israeli levies while simultaneously saying that if he was to be taxed, 75% of it should be transferred to the Palestinian Authority.
    The judge further ruled that NIS 30,000 ($10,000) be paid to an independent assessor hired for the case for expenses and legal fees. The state was represented by Adv. Amir Shaker.
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