Israeli Tax Authority — Israeli-Source Income Tax Exemption for Olim (2025–2030 Temporary Benefit)
Source: https://cpa-dray.com/en/blog/olim-tax-guide · 2026
Who Qualifies
If you made aliyah between 5 November 2025 and 31 December 2026, you may receive a tax exemption on Israeli-source earned income (salary and self-employment income — not passive income such as dividends or rent).
This is a temporary additional benefit layered on top of the existing 10-year exemption under sections 14 and 97 of the Income Tax Ordinance. It does not replace existing rights.
Exemption Caps by Tax Year
| Tax Year | Exemption Cap |
|---|---|
| 2026 | ₪600,000 |
| 2027 | ₪1,000,000 |
| 2028 | ₪1,000,000 |
| 2029 | ₪350,000 |
| 2030 | ₪150,000 |
The benefit is most generous in 2027–2028 and gradually phases out by 2030.
Important Conditions
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Bituach Leumi still applies. The exemption covers income tax only. You must still pay National Insurance (Bituach Leumi) — up to 18% on income up to approximately ₪625,000 per year.
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Residency requirement. If you leave Israel and become a non-resident during 2028 or 2029, AND spent fewer than 75 days in Israel in that year, you lose the exemption entirely from the start.
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You can opt out. The exemption is automatic but you may choose not to use it if it suits your tax planning.
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Pro-rated for 2026. If you arrived part-way through 2026, the ₪600,000 cap is calculated proportionally based on how many months you were a resident.
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Income from a relative. If your qualifying income comes from a family member’s business or company, the annual cap is lower — ₪140,000 per year for 2026–2029. This is an anti-abuse measure to prevent channelling income through related parties.
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Existing rights preserved. The standard 10-year exemption for new olim is not replaced by this benefit — it is an additional temporary benefit.