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Exemption from the Tax and Reporting Obligation on Income from Abroad
Prospective Olim, take note!
Are you familiar with the benefit for olim regarding tax exemption on income from abroad? Please take note of this update:
Olim who will become residents of Israel from January 1, 2026 and later, will be exempt from tax on income from abroad, but will have a reporting obligation on this income (until now there was no need to report).
Who is considered a resident of Israel for tax purposes?
An Israeli resident is considered someone whose center of life is in Israel, starting from the day of relocating to and living their life in Israel.
The ongoing benefit: Tax exemption for 10 years on all income sourced from abroad!
The exemption applies to:
Passive income: Dividends, rental income, royalties, capital gains from sale of assets abroad
Active income: Business income from assets abroad, income from self-employment sourced abroad
Companies you own abroad: Control and management of foreign companies from Israel will be considered control and management from outside Israel for the 10 year period.
Note the dates:
Anyone who made aliyah before Jan.1, 2026 is exempt from tax and reporting on income from abroad.
Anyone who made aliyah on Jan. 1, 2026 or later is still exempt from tax but obligated to report.
Starting from the 11th year, you must pay tax on this income.
Additional tax benefits for new olim
There are many additional tax benefits for olim to ease absorption into the country: benefits on income tax in Israel, an adjustment year, benefits for purchasing an apartment, and more…
Making aliyah in 2026?
Follow us for updates on additional income tax benefits in Israel!
Have questions?
Business consultation center of the Ministry of Aliyah and Integration: *8115
Tax Authority hotline: *4954
This post was written in collaboration with the Tax Authority.