Concept
For decades, Israel has attracted wealthy immigrants with one of the world's most generous tax benefits: a new immigrant or a returning resident after a long absence is exempt from tax on all income from sources outside the country for ten years. In 2026, the rules are changing: the exemption itself remains, but the reporting exemption is being removed, and this is an important detail for anyone planning to relocate.
Ten Years Without Tax on Worldwide Income
The essence of the regime is simple. Anyone who becomes a tax resident of Israel for the first time (oleh) or returns after at least ten years abroad receives a ten-year exemption from Israeli tax on income and capital gains arising outside Israel. Dividends, interest, profits from the sale of foreign assets, income from foreign business—all of this is not taxed for ten years. The benefit does not depend on the amount and takes effect from the date of obtaining resident status.
What Changed in 2026
Until recently, the exemption also extended to reporting: an immigrant could avoid declaring foreign income and assets for ten years. An amendment to the Tax Ordinance, adopted in 2024, abolished this concession for those who become residents from January 1, 2026. Those who immigrated before the end of 2025 retain the previous reporting exemption. New olim from 2026 onwards are required to file tax returns and disclose their foreign income and assets to the tax authority, although the tax itself is still not levied on them for the full ten years.
New Incentive for 2026 Immigrants
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In parallel, Israel has introduced a separate benefit for those relocating in 2026: for the first two years, they are subject to a zero income tax rate within an annual ceiling. For 2026 and 2027, income up to 1 million shekels is exempt, then the ceiling decreases—600 thousand in 2028, 350 thousand in 2029, and 150 thousand in 2030. This incentive works on top of the classic ten-year exemption and is aimed at accelerating the influx of new residents.
⚙️ Exemption from reporting and exemption from tax are different things, and from 2026 they have diverged. A new immigrant still does not pay tax on foreign income for ten years, but is now required to declare it. For those who value privacy, it makes sense to obtain residency before the end of 2025; for others, the regime remains one of the most favorable in the world.
🍓 Israel gives new immigrants ten years without tax on income and gains from foreign sources, and this benefit remains. From January 1, 2026, only the reporting exemption is removed: those who immigrated before the end of 2025 continue not to declare foreign assets, while those who arrive later are required to disclose them. Additionally, for olim of 2026, a zero rate for the first two years within an annual ceiling has been introduced.
This material is of an expert-analytical nature and does not constitute individual legal or tax advice.
Key factual claims
- In parallel, Israel has introduced a separate benefit for those relocating in 2026: for the first two years, they are subject to a zero income tax rate within an annual ceiling.