Returning Resident

If you left Israel and lived abroad for ten successive years, you are defined by the Income Tax Authority as a Returning Veteran – enjoying all the benefits of a new immigrant, so long as your and your family’s place of residence, your place of work and other aspects of association and focus of life were abroad during those years.

In order to encourage the return of Israelis between 2007 & 2009 – Israel’s 60th year of independence – tax benefits will also be provided to Israelis who lived abroad for five consecutive years and who return during this designated period, so long as they were considered overseas residents on January 1st, 2007.

Ten good years

If you are an Israeli citizen returning to Israel after living abroad for at least ten years, you are entitled to ten years of benefits and assistance. In accordance with the tax reform, during the next ten years you will be exempt from taxes on income generated outside Israel. This 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.

Benefits for companies you own

If you return to Israel, and you own a foreign company that is active abroad and managed by you, or else you own its shares, it will not 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.

Minding your pension

Upon your return to Israel, your pension will be tax exempt for a period of 10 years.