preface

BDO Israel
DOING BUSINESS IN ISRAEL
8.2.3.9. Tax Exemptions for New Immigrants and Veteran
Returning Residents on Income Generated Outside Israel
Total tax exemption for all types of income of a new immigrant
and veteran returning resident, generated outside Israel from the
date of immigration/return to Israel, regardless of the date of
acquiring the property (prior to immigration/return or thereafter)
or type of income (accrual or equity), except if the source of
income is property received as a tax exempt gift after 1.1.2007.
A proportional tax exemption will be granted on capital gains
derived from the disposal of property outside Israel while the
capital gains were derived subsequent to the said 10 year period
as was customary prior to the reform.
The Minister of Finance has the authority to extend the benefit
period by 10 additional years by means of a regulation (as yet
unpublished), in case of a significant investment in Israel within
2 years from the assumption of residence by the individuals
concerned, or within 2 years from the date on which the said
regulation becomes effective.
8.2.3.10. Tax Exemption Granted to Returning Residents
A returning resident will be exempt from tax for five years from
the date of returning to Israel, on income derived outside Israel,
or from assets located outside Israel which do not constitute a
business income , as detailed below, unless otherwise requested
by the said resident with respect to all or part of his income:
(1) Income from pension, royalties, rental fees, interest and
dividend, originating from assets outside Israel acquired by
the returning resident during his stay oabroad, after he had
ceased to be an Israeli resident.
(2) Income from interest and dividend derived from "Privileged
Securities".
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