\u00a0By David Halbwax L.L.M, International Legal Counsel<\/span><\/p>\n

July 2020<\/span><\/p>\n

To celebrate its 60<\/i><\/b>th<\/i><\/b> anniversary, the State of Israel has granted significant tax benefits still applicable to new immigrants and returning residents, including exemption for a period of 10 years from tax, reporting assets and income generated outside Israel.<\/i><\/b><\/p>\n

After more a decade of its application, it seems appropriate to examine the content of this tax exemption measures (I) and their binding limits (II).<\/i><\/b><\/p>\n

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  Content of the tax- Aliyah Exemption measures<\/b><\/h2>\n<\/li>\n<\/ul>\n

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  According to the Tax Ordinance and Regulations, new immigrants and returning residents who have resided overseas for at least 10 years or resided overseas for 5 years and returned to Israel during 2007-2009 period, are entitled to the following benefits:<\/span><\/p>\n

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    10-year tax- exempt for company active abroad owned and\/or managed by new immigrants or returning residents<\/b><\/h2>\n<\/li>\n<\/ul>\n

    During this 10-year period, the company can generate tax-free revenue during a decade only if revenues are not generated in Israel.<\/span><\/p>\n

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      10-year tax- exempt from reporting earnings whose source is from abroad. <\/b><\/h2>\n<\/li>\n<\/ul>\n

      New immigrants and returning residents and companies under this prescription are not obligated to report earnings.<\/span> However,<\/b> income from activities in Israel or from Israeli investments and assets generated following Alyah or return to Israel is subject to reporting and taxation according to regular tax laws.<\/span><\/p>\n

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        10 year tax- exempt for all income generated outside Israel<\/b><\/h2>\n<\/li>\n<\/ul>\n

        New immigrants and returning residents are exempted for 10 years for all income<\/span>, active or passiv<\/span>e such as pensions, royalties, dividends and rental of assets\u00a0<\/span><\/p>\n

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        \u00a0II<\/span> \u00a0 \u00a0 \u00a0 <\/span>Limits of Tax Alyah Exemption<\/span><\/h3>\n

        New immigrants and returning residents should be aware that the 10-year exemption <\/span>does not apply to income for work done in Israel for a foreign firm<\/span>.<\/span><\/p>\n

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        What does it mean?<\/span><\/h3>\n

        In fact, a new immigrant\u00a0 or returning resident who keeps running his business from <\/span>Israel is required to pay Israeli tax from day on income for all activities performed in Israel,<\/span> which is frequently\u00a0 the case for the new immigrants and\u00a0 returning residents from Europe and USA.<\/span><\/p>\n

        In consequence, <\/span>just income attributable to days work abroad is,<\/span> in principle, exempt from Israeli income tax.<\/span><\/p>\n

        Our law office is able to assist you in defining the best strategy to avoid unpleasant situations due the complexity of this legislation.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

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