The Ministry of Finance approved a new tax reform formulated by the Tax Authority and the Ministry of Immigration Absorption as part of the "Returning Home for Israel's 60th" campaign to help you with your Aliyah and assist you in making Israel your new home.

The reform is one more benefit the Ministry of Immigrant Absorption initiated for Israel's 60th anniversary, all intended to ease the return of Israelis living abroad and the absorption of new immigrants. Taxation experts regard the new reform a complete revolution in terms of tax benefits, with both significant exemptions for new immigrants and returning citizens, and comparing the status of returning citizens to that of new immigrants.

Following is a detailed outline of the proposal, explaining the guidelines for the various tax exemptions available to you as new immigrants or returning citizens:

New tax status for returning residents
A new tax status - “a returning resident classified as a new immigrant for tax purposes”, will expand tax benefits given to returning residents and will make them equivalent to the tax benefits given to new immigrants, for a period of 5 years, including benefits introduced in this reform. The new status will be given to individuals who:
 Resided overseas for at least 10 years from the date they left Israel
 Returned to Israel during 2008-2009
 Were considered foreign residents on January 1st 2008

A 10-year exemption for all types of income whose source is from abroad
An exemption for new immigrants on all income whose source is from abroad, for 10 years from the date of Aliyah, including:
 Sale of assets and investments overseas
 Income from current deposits overseas
 Income from capital gains on the sale of assets from the properties and investments abroad that produced the exempt income.

One-time Adjustment Track
In order to allow individuals to reach an informed decision about where they wish to live, they will be given a one-year adjustment period from the date of their arrival. During this year new immigrants and returning citizens can request not to be considered a resident of Israel for income tax purposes.

Tax Exemptions for Companies Managed by New Immigrants
Companies managed by new immigrants will not be classified as "Israeli resident companies", provided that income is not generated in Israel. This exemption removes any effect the Aliyah might have on companies in which immigrants hold shares that should be otherwise subjected to Israeli tax laws.

Exemption from Reporting Earnings Whose Source is from Abroad
Individuals, and the companies that are under their direction, are not obligated to report earnings that benefit from exemption. Only income from activities in Israel and from Israeli investments and assets that is generated following Aliyah or return to the country is subject to reporting and taxation according to regular tax laws.

The following table summarizes the tax benefits before and after the reform:

	Type of Benefit	Current status	Proposed reform
1	New Tax Status - a returning resident classified as a new immigrant for tax purposes	Does not exist.	Status will be granted for a 5-year period to returning residents who resided at least 10 years abroad.
2	Exemption on passive income (interests, dividends, rentals etc.)	Granted to new immigrants only for a 5-year period.	Granted for a 10-year period.
3	Exemption on income from professional work and salaries.	Granted only to new immigrants who owned a business 5 years prior to their Aliyah	Granted for a 10-year period.
4	Adjustment track	Does not exist.	1-year adjustment period from the date of arrival to Israel.
5	Does Companies managed by new immigrants and returning residents classified as a new immigrant for tax purposes	Does not exist.	During years of exemption company residence will not be determined according to the management and control test
6	Exemption from reporting	Limited exemption	Full exemption on reporting exempted income.

* All benefits apply to both new immigrants and returning residents classified as new immigrants for tax purposes

The state of Israel – at your service
More details and information to help you plan your arrival to Israel is available from many of Israel's governmental websites:

 The Israeli Tax Authority website offers detailed information regarding taxation in Israel as well as direct contact links for any questions you might have.
 You can join the "Returning Home" campaign or contact its special information center on The Ministry of Immigration Absorption website.
 General information for new immigrants and returning citizens can be found on the gov.il portal, as well as a guide for investing in Israel.
 Learn about the special benefits offered by the National Insurance Institute of Israel for returning citizens on Israel's 60th anniversary.

This is your chance to come home. Israel is looking forward to assisting you in any possible way on its 60th anniversary.