New immigrant 

Benefits for new immigrants until now included a five-year tax exemption on passive income only – interest, pensions, royalties and rental of assets abroad. Also included was a four-year exemption on income from a business that had been active for at least five years prior to the Oleh’s immigration. A ten-year exemption, on the other hand, was only granted on income from the realization of assets and investments abroad that yielded tax-free income. Now, all that is about to change.

Ten good years

If you are a new immigrant, the new tax reform law provides – for the first time ever – a clear-cut, cross-the-border exemption on all income generated outside Israel for a period of ten years from the moment of your arrival. The exemption covers all income, active or passive, whether resulting from the realization of assets and investments abroad or from regular income abroad.

Benefits for companies you own

If you immigrated to Israel and you own a foreign company that is active abroad and managed by you, or else you own its shares, it will no longer be considered a company owned by an Israeli resident, and it will no longer be automatically subject to Israeli taxes. Thus, the company will be able to continue generating tax-free revenues, so long as these revenues are not generated in Israel.

Comprehensive tax exemption on pension

As a new immigrant, you will be exempt from paying taxes on you pension.

Credit points are worth money

During your first 3½ years in Israel, you will be entitled to tax deductions based on 3 tax credit points during the first 18 months, 2 points the following year, and 1 point the year after. In 2008, each tax credit point was worth about NIS 2,200.

20-year exemption

You will be exempt from paying tax on interest on foreign currency deposits for 20 years, so long as the source of those deposits is capital you possessed prior to your immigration, and which was deposited in an Israeli banking institution.