Tax benefits to new immigrants and returning residents
Summary of Israeli Tax benefits
Dr. Avi Nov, Adv.
April 2010
(1) New immigrants and senior returning residents are exempt from tax on all income and capital gain derived outside of Israel for ten years. This tax exemption covers all income, active or passive, such as interest, dividends, pensions, royalties and rental of assets. All income, whether from the realization of assets and investments abroad or from regular income abroad, is tax exempt.
(2) New immigrants and senior returning residents are exempt from reporting their tax exempt income and foreign assets for ten years.
(3) Foreign companies controlled by new immigrants and senior returning residents will not be classified as Israeli tax residents companies, or as a Control Foreign Corporation (CFC), or as a Control Foreign Professional Company (CFPC), only because their shareholders became Israeli residents.
(4) New immigrants and senior returning residents who own and manage a foreign company that is active abroad, or own its shares, will not be subject to Israeli taxes. The company will be able to continue generating tax-free revenues, so long as these revenues are not generated in Israel.
(5) New immigrants and sinior returning residents are exempt from paying taxes on their pension for a period of 10 years.
(6) New immigrants enjoy tax deductions based on the following division:
- During your first 18 month- 3 tax credit points.
- During the following year- 2 points.
- During the third year- 1 point.
(7) New Immigrants are entitled to exemption from paying tax on interest on foreign currency deposits for 20 years, so long as the source of those deposits is capital they possessed prior to their immigration, and which was deposited in an Israeli banking institution.
See also:
Israeli Tax Incentives to Olim: New Rules Proposed
Israeli Taxation of New Immigrants: Proposed Changes
A Guide to tax breaks to new immigrants and returning residents (in Hebrew)
Immigration to Israel: Tax Update
