Israel Tax Authority — Income Tax Concessions for New Immigrants

Source: Israeli Government Guide for New Immigrants · 2026-05

64 Every citizen who has an income is required to pay income tax to the State of Israel. Israel uses a progressive scale to calculate the level of income tax: until a certain sum, the income of Israeli citizens is not taxable, beyond this minimal sum, depending on the level of income, there is a division to a few levels: the tax brackets. The sum that is equal to the level of the first bracket is taxable by minimal tax. Each bracket requires a higher tax, until the level of maximal taxation. New immigrants and returning residents may be eligible for income tax concessions according to the regulations of the Ministry of Finance. Following are some of the main concessions: Exemption from taxation and reporting for a 10 - year period New immigrants, immigrant citizens, returning minors and returning residents may be eligible for an exemption on income tax, and reporting on income and assets from a foreign source that were earned or created abroad, for a 10-year period. Acclimation Year A “veteran” returning resident or new immigrant can be eligible for an “acclimation year,” during which they are not considered a resident of Israel for Income Tax purposes. In order to benefit from an acclimation year, it is necessary to complete an online form on the Tax Authority website at the following link: Hebrew: https://www.gov.il/he/service/application_for_year_of_ acclimatization English: https://www.gov.il/en/service/application_for_year_of_ acclimatization The form should be submitted to the Ministry of Aliyah and Integration within 90 days from the date of arrival in Israel. Income Tax Concessions

65 A link to the Tax Authority website in English: https://www.gov.il/en/departments/israel_tax_authority/govil- landing-page Granting Personal Credit Points Everyone who has an income can receive “credit points” that are determined in accordance with personal factors. The points lower the amount of income tax one has to pay. New immigrants can receive a concession on income tax in the form of credit points for 3.5 years following aliyah, as presented in the following table: • During the first 18 months - 3 credit points. • The next 12 months - 2 points. • During the last 12 months - 1 point. In order to receive the tax credit, complete Form 101 and submit it to the employer before the conclusion of the fiscal year (before the end of December). Attach a copy of the Te’udat Oleh. Check your monthly salary slip (Tlush) to make sure you are receiving the credit points you deserve. If one is employed by more than one work place, one should turn to the offices of the income tax and do a “tax adjustment” (“Te’um- Mas”) in order to prevent overpaying tax for the extra salary. For additional information about this matter, go to the Tax Authority website: In Hebrew: https://www.gov.il/he/Departments/General/immigrant-guide In English: https://www.gov.il/en/Departments/General/immigrant-guide