Il New Immigrant

---
name: il-new-immigrant
description: "Israel new immigrant and returning resident 10-year tax exemption on foreign income and gains. Trigger on: \"Israel new immigrant tax\", \"aliyah tax exemption\", \"Israel 10-year exemption\", \"returning resident Israel\", \"Israel oleh tax\", \"foreign income exempt Israel\", \"Israel tax for new immigrants\", \"Israel passive income exemption oleh\". ALWAYS load before advising a new immigrant or returning resident on their Israel tax position."
license: "AGPL-3.0-or-later (code) / OpenAccountants Guide License v1.0 (content)"
metadata:
  source: openaccountants
  openaccountants_url: "https://www.openaccountants.com/skills/il-new-immigrant"
  jurisdiction: "IL"
  tax_year: "2026"
  last_updated: "2026-11-03"
---

# IL New Immigrant

## Quick reference

**Quick reference**

| Item | Value | Source |
| --- | --- | --- |
| Exemption period (new immigrant, veteran returning resident) | **10 years** from the date the individual became an Israeli resident, on income produced or accrued abroad | https://www.gov.il/BlobFolder/generalpage/income-tax-guide-knowyourright/he/Guides_IncomeTax_da-2025.pdf (PDF p.54, printed p.52) |
| Exemption period (returning resident who is not "veteran") | **5 years** from return, on a closed list of passive foreign income (see below) | same |
| Who qualifies for 10 years | A person who became an Israeli resident for the first time from 1/1/2007 ("new immigrant"), and a "veteran returning resident": abroad for more than 10 consecutive years | same |
| Who qualifies for 5 years | A returning resident who left Israel from 1/1/2009 and stayed abroad for more than 6 consecutive years (left by 31/12/2008: more than 3 years abroad and ceased to be resident), and who returned from 1/1/2007 | same |
| Israeli-source income | Taxed in the normal way: the 10-year exemption covers only income produced or accrued abroad. Exception: the 2026 temporary provision below | same |
| 2026 temporary provision (Encouraging Immigration and Return law, Economic Efficiency Law 2026 chapter D, in force 31.3.2026) | A new immigrant or veteran returning resident who arrived between 5/11/2025 and 31/12/2026 is exempt on Israeli income from personal exertion (business and salary) up to an annual ceiling: NIS 600,000 (2026), 1,000,000 (2027), 1,000,000 (2028), 350,000 (2029), 150,000 (2030). This is on top of any other benefit | https://www.gov.il/BlobFolder/generalpage/income-tax-monthly-deductions-booklet/he/generalInformation_income-tax-monthly-deductions-booklet_monthly-deductions-booklet-2026.pdf (p.4) |
| Reporting, residence began before 1 January 2026 | New immigrants and veteran returning residents are exempt for 10 years from reporting foreign-source income and from a capital declaration for those assets, and do not file Form 150 | https://www.gov.il/BlobFolder/generalpage/income-tax-guide-knowyourright/he/Guides_IncomeTax_da-2025.pdf (PDF pp.7, 54); https://www.gov.il/BlobFolder/policy/professional-directives-180226-1/he/IncomeTax_professional-directives-180226-1.pdf (s.2.1.2) |
| Reporting, residence begins on or after 1 January 2026 | If the person holds rights in a foreign entity (a body of persons resident abroad), directly or indirectly, and must file (or chooses to file) an annual return, they must complete and file Form 150 (declaration of holdings in a foreign entity, an annex to the annual return); during the s.14(a) benefit period parts C.2 and C.3 are eased. No such holding: no Form 150 duty | https://www.gov.il/BlobFolder/policy/professional-directives-180226-1/he/IncomeTax_professional-directives-180226-1.pdf (s.2.1.2, citing Amendment 272) |
| Legislation | Income Tax Ordinance s.14(a) (new immigrant, veteran returning resident), s.14(c) (returning resident), s.134B (reporting), as cited in the Authority's guide and Circular 4/2026 | https://www.gov.il/BlobFolder/generalpage/income-tax-guide-knowyourright/he/Guides_IncomeTax_da-2025.pdf; https://www.gov.il/BlobFolder/policy/professional-directives-180226-1/he/IncomeTax_professional-directives-180226-1.pdf |
| Tax authority | Israel Tax Authority (ITA): taxes.gov.il | |

## Who qualifies

The Authority's guide (rights guide, PDF p.54) defines three groups. Ask the client for the date they became resident and, for a returner, the date they left Israel and the length of the stay abroad.

- **New immigrant (עולה חדש / "first-time resident")**: an individual who became an Israeli resident for the first time from 1/1/2007. A person who became resident for the first time before 1/1/2007 gets no tax benefit from tax year 2012 onward (except capital gains in some cases).
- **Veteran returning resident (תושב חוזר ותיק)**: a person who stayed abroad for more than 10 consecutive years. For a return in 2007 to 2009 a temporary provision counted 5 consecutive years abroad. Same 10-year exemption as a new immigrant.
- **Returning resident (תושב חוזר, not "veteran")**: for a resident who left Israel from 1/1/2009, someone who stayed abroad for more than 6 consecutive years; for one who left by 31/12/2008, more than 3 years abroad and ceased to be resident. A returning resident who came back from 1/1/2007 is exempt for 5 years from return on income from pensions, royalties, rent, interest and dividends whose source is assets abroad bought while abroad, and for 5 years on interest, dividends or capital gains from "preferred securities" (securities bought after return in place of securities bought while abroad).

## What the exemption covers

For a new immigrant or veteran returning resident, for 10 years from becoming resident (rights guide, PDF p.54). The guide's wording is income "produced or accrued abroad"; the rows below apply that test.

**What the exemption covers**

| Income type | Treatment |
| --- | --- |
| Income produced or accrued abroad (employment, business, dividends, interest, rent, capital gains on assets abroad) | **Exempt** for 10 years |
| Israeli-source income (work done in Israel, Israeli business) | **Taxed normally**, except the 2026 temporary provision for arrivals from 5/11/2025 to 31/12/2026 (exempt up to the annual ceiling, see Quick reference) |
| Israeli capital gains | **Taxed normally** |

For a returning resident who is not "veteran", only the 5-year list above is exempt; other foreign income is taxed.

## How to claim the exemption, and what must still be reported

Keep the tax exemption and the duty to report apart. They depend on different dates.

- **Tax exemption**: the 10-year exemption needs no election (rights guide, PDF p.54 states it as a rule). It runs from the date the person became an Israeli resident.
- **Reporting, residence began before 1 January 2026**: the person is exempt for 10 years from reporting income produced abroad or from assets abroad, and from a capital declaration for those assets (rights guide, PDF pp.7 and 54). Form 150 is not required (Circular 4/2026 s.2.1.2).
- **Reporting, residence begins on or after 1 January 2026**: Form 150 is owed only by an Israeli resident who holds rights in a foreign entity, directly or indirectly (Circular 4/2026 s.2), and only when they must file, or choose to file, an annual return, because the form is an annex to that return (Circular 4/2026 s.2.1). If both hold, Circular 4/2026 s.2.1.2 applies the Form 150 duty to new immigrants and veteran returning residents who become residents from 1 January 2026, with eased completion of parts C.2 (controlled foreign company) and C.3 (foreign professional company) during the s.14(a) benefit period. A person with no holding in a foreign entity has no Form 150 duty. Ask whether they hold shares or other rights in any foreign company, partnership or other entity. Do not tell such a person they "simply do not report". unverified: whether they must also report their exempt foreign income on the annual return; Amendment 272 itself was not opened.
- **Returning resident (s.14(c))**: if they hold rights in a foreign entity, directly or indirectly, and must file (or choose to file) an annual return, they must complete and file Form 150; part C.2 is eased during the benefit period; part C.3 is completed like any other resident (Circular 4/2026 ss.2, 2.1, 2.1.3).
- **Election to be taxed**: unverified: the individual can elect to be taxed on foreign income (for example to use foreign tax credits), and the election is irrevocable once made.

## Practical considerations

1. **Israeli employer payroll**: work done for an Israeli employer is Israeli-source income: taxed at normal rates regardless of the 10-year exemption. If the person arrived between 5/11/2025 and 31/12/2026, the 2026 temporary provision exempts Israeli salary and business income up to NIS 600,000 in 2026 (then 1,000,000, 1,000,000, 350,000 and 150,000 for 2027 to 2030) (2026 deduction booklet p.4). unverified: its further conditions; the booklet says a circular with all conditions will follow.

2. **Foreign employer or foreign bank account**: the exemption covers income produced or accrued abroad (rights guide, PDF p.54). A foreign employer or a foreign bank account does not by itself make income foreign-source. Ask where the work is done and where the income is produced before treating it as exempt.

3. **Capital gains**: sell assets abroad during the exemption period → exempt. Sell Israeli shares or Israeli real property → taxed normally.

4. **Trusts and foundations**: unverified: foreign trusts and foundations held by new immigrants also receive special treatment during the exemption period.

5. **The clock**: starts on the date of becoming an Israeli resident. Track this date precisely; it also decides which reporting rule applies (before or from 1 January 2026).

## Israel capital gains rates (for Israeli-source income)

**Israel capital gains rates (for Israeli-source income)**

| Asset type | Rate |
| --- | --- |
| Listed shares (bought after 1 Jan 2012) | unverified: 25% (or 30% if >10% shareholder) |
| Unlisted shares | unverified: 25% (or 30% if >10% shareholder) |
| Real property: residential | unverified: complex (betterment levy, linear calculation) |
| Inflation adjustment | unverified: available (reduces the real gain) |

## Earlier references

- Income Tax Ordinance [New Version], s.14(a) (new immigrants and veteran returning residents) and s.14(c) (returning residents), as described in the Authority's guide
- unverified: ITO s.97(b) (capital gains exemption for new immigrants)
- Israel Tax Authority Circular 4/2026 on Form 150

> Working paper only. The interaction of the exemption with Israeli payroll (if employed by an Israeli employer) and with trust structures is complex. Have a qualified Israeli CPA (רואה חשבון) review before making employment or asset decisions.

## Recomputed checks (2026)

```oa-check
name: 10-year exemption, new immigrant resident from 2019, last exempt tax year
inputs:
  start_year: 2019
  years: 10
steps:
  - last_year: start_year+years-1
expected:
  last_year: 2028
```

```oa-check
name: Returning resident (not veteran), 5 years from a 2024 return, last exempt tax year
inputs:
  start_year: 2024
  years: 5
steps:
  - last_year: start_year+years-1
expected:
  last_year: 2028
```

The two checks count whole tax years for a person who became resident on 1 January; for a mid-year date, count 10 (or 5) years from the date itself. One credit point is worth NIS 242 a month in 2026 (https://www.gov.il/BlobFolder/generalpage/income-tax-monthly-deductions-booklet/he/generalInformation_income-tax-monthly-deductions-booklet_monthly-deductions-booklet-2026.pdf, p.12).

## Sources

| Source | URL | Read on |
|---|---|---|
| Israel Tax Authority, "Know your rights and duties" guide, tax year 2025 (published July 2026), read PDF p.7 (reporting exemption, veteran returning resident) and PDF p.54, printed p.52 (s.14 exemptions, the three groups, the 5-year list) | https://www.gov.il/BlobFolder/generalpage/income-tax-guide-knowyourright/he/Guides_IncomeTax_da-2025.pdf | 2026-11-03 |
| Israel Tax Authority, Circular 4/2026 (18 February 2026), Form 150, read pp.1-4 (ss.1, 2 who must file: an Israeli resident holding rights in a foreign entity directly or indirectly, 2.1, 2.1.2, 2.1.3) | https://www.gov.il/BlobFolder/policy/professional-directives-180226-1/he/IncomeTax_professional-directives-180226-1.pdf | 2026-11-03 |
| Israel Tax Authority, salary-deduction booklet from January 2026 (updated April 2026), read p.4 (2026 temporary provision for immigrants and veteran returning residents arriving 5/11/2025 to 31/12/2026, annual ceilings) and p.12 (credit point NIS 242 a month) | https://www.gov.il/BlobFolder/generalpage/income-tax-monthly-deductions-booklet/he/generalInformation_income-tax-monthly-deductions-booklet_monthly-deductions-booklet-2026.pdf | 2026-11-03 |

Not yet confirmed: the conditions of the 2026 temporary provision beyond its dates and ceilings (the Authority said a circular would follow); Amendment 272 itself, and whether a person who becomes resident from 1 January 2026 must report exempt foreign income on the annual return (Circular 4/2026 confirms only the Form 150 duty); the irrevocable election to be taxed; trusts and foundations; ITO s.97(b); the capital gains rates table. The guide that defines the groups is for tax year 2025; the definitions are not year-specific, but no 2026 edition was available.

## Today's figures and who stands behind this skill

This file is an AI skill (tax rules your AI follows) from OpenAccountants, copied on 2026-11-03. Rates, thresholds and deadlines change. For the current version of this skill, its official sources and the named accountant (if any) who stands behind it, call `get_skill` with slug `il-new-immigrant` on the OpenAccountants connector (https://www.openaccountants.com/connect), or read https://www.openaccountants.com/skills/il-new-immigrant. If neither is available, confirm every figure against the official source pages cited above before relying on it.