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New Immigrant / Returning Resident

Israel is known for its welcoming attitude towards new immigrants, and part of this welcome includes a variety of tax benefits and exemptions designed to make the transition smoother. These benefits, mostly legislated in Amendment 168 to the Income Tax Ordinance, aim to make Israel more tax-attractive for new immigrants, thereby easing the relocation process.

A new immigrant, in this context, is someone who was never a resident of Israel before. The cornerstone of these benefits for a new immigrant is a ten-year exemption from tax on various types of income generated or accrued abroad. This includes business income, passive income (like rent or dividends), capital gains, and even salaries accumulated abroad. This comprehensive package is intended to ease the transition (at least financially) during the critical first decade of immigration to Israel. It's important to note that income generated in Israel is not covered under these exemptions - so those working within the country are subject to regular tax rules, even if they are new immigrants, except for few exceptions.

Returning residents, who have spent a long period abroad, are also generally eligible for benefits, with those returning after more than 10 years abroad (veteran returning residents) being entitled to benefits similar to those of a new immigrant.

It's worth mentioning that although these concessions are generous, they are not indefinite. An accurate assessment of the immigration date, and accordingly the end of the exemption period, is crucial to avoid unexpected tax payments.

Israel's tax benefits for new immigrants are part of the country's commitment to ensuring a supportive environment for those who choose to make it their new home. While the process involves some complexities, the overarching goal is clear: to provide a solid financial foundation for new beginnings.

Our office assists new immigrants and returning residents with forward-thinking – preparing today for a clearer future.

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