The Law Encouraging Immigration to and Return to Israel (temporary order), 2026, grants an exemption on certain Israeli-source income for new immigrants and long-time returning residents, subject to conditions set in the law.
Who is eligible
A new immigrant who first became an Israeli resident between 5 November 2025 and the end of the 2026 tax year; and a long-time returning resident who was a foreign resident for at least 10 years and returned in that period, holding a returning-resident certificate.
Which income is exempt
The exemption applies to qualifying income — mainly taxable personal-exertion income under sections 2(1) or 2(2) — produced in Israel. Passive income (interest, dividends, rent, capital gains) is excluded.
Exemption ceilings by tax year
2026: up to ILS 600,000 · 2027–2028: up to ILS 1,000,000 each year · 2029: up to ILS 350,000 · 2030: up to ILS 150,000.
Practical notes
Given the complexity, assess in advance whether the individual meets the definition, the relevant residency date, and the implications for tax planning and reporting. Individual consultation is recommended before immigrating or starting business activity.
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