How Are New Immigrants Taxed in Israel? No Tax on Foreign Income for 10 Years
New immigrants pay no Israeli tax on income earned abroad for 10 years, the Israel Tax Authority states. Credit points, reporting and the 2025 benefit.
New immigrants to Israel pay no Israeli tax on income earned abroad for 10 years, the Israel Tax Authority states in its aliyah leaflet for 2026. Income earned in Israel is taxed at the ordinary 2026 rates. A new immigrant also receives additional credit points for 54 months from arrival. Those who made aliyah from 5 November 2025 receive a further 5-year benefit on Israeli earnings from work.
| Figure | What it counts | Period |
|---|---|---|
| 10 years | Tax exemption on all income earned abroad, for new immigrants and veteran returning residents | From becoming an Israeli resident |
| 1 January 2026 | Arrival date from which foreign income is reported, though still untaxed | Arrivals on or after that date |
| 54 months | Length of the additional credit points a new immigrant receives | From arrival |
| NIS 2,904 | Annual value of one tax credit point, NIS 242 a month | Tax year 2026 |
| 5 years | Additional benefit on Israeli income from employment or self-employment | Aliyah from 5 November 2025 |
| 47% | Top marginal rate on income from work or business, above NIS 560,280 a year | Tax year 2026 |
| Up to 25% | Rate on real capital gain accrued from 1 January 2012 | Tax year 2025 |
Source: Israel Tax Authority, aliyah leaflet valid for 2026, withholding tables updated April 2026, and Form 1399 explanatory notes for tax year 2025.
New immigrants are exempt for 10 years on income earned abroad
The Israel Tax Authority states that new immigrants are exempt from tax for 10 years on all income earned abroad. The same exemption covers veteran returning residents, whom the leaflet defines as Israeli residents who lived abroad for more than 10 years. Returning residents who lived abroad for 6 years receive a shorter exemption.
| Who | Income covered | Exemption |
|---|---|---|
| New immigrants | All income earned abroad | 10 years |
| Veteran returning residents, abroad more than 10 years | All income earned abroad | 10 years |
| Returning residents, abroad 6 years | Non-business income from abroad | 5 years |
Source: Israel Tax Authority, aliyah leaflet, information valid for 2026.
The leaflet lists the income the 10-year exemption covers:
- Foreign wages
- Business income
- Rent
- Interest
- Dividends
- Capital gains on assets abroad
The Israel Tax Authority states, in its notes to Form 1399 for tax year 2025, how the exemption applies to a sale. A new immigrant or veteran returning resident pays no tax on the gain from selling an asset held outside Israel if the sale falls within 10 years of becoming resident. After 10 years, the part of the real gain accrued up to the end of those 10 years stays exempt.
Arrivals since 1 January 2026 report foreign income, still untaxed
The Israel Tax Authority states that those who arrived up to 31 December 2025 are also exempt from reporting foreign income and foreign assets for the 10 years. Those arriving on or after 1 January 2026 keep the 10-year tax exemption and are required to report the income. The tax treatment of foreign income is the same for both groups.
| Arrival date | Tax on foreign income | Reporting |
|---|---|---|
| Up to 31 December 2025 | Exempt for 10 years | Exempt from reporting foreign income and foreign assets for 10 years |
| On or after 1 January 2026 | Exempt for 10 years | Foreign income is reported |
Source: Israel Tax Authority, aliyah leaflet, information valid for 2026.
Immigrants receive extra credit points for 54 months, worth NIS 2,904 each
A new immigrant receives additional tax credit points for 54 months from arrival, the Israel Tax Authority states, and each point is worth NIS 2,904 a year in 2026. The schedule opens with 1 point for the first 12 months and rises to 3 points for the following 18. These points sit on top of the points every resident receives: 2.5 for men and 2.75 for women, as the leaflet prints them.
The Israel Tax Authority puts the same point at NIS 242 a month in its 2026 withholding tables, and 242 times 12 is 2,904. A credit point is deducted from the tax computed, so it reduces tax owed in Israel on Israeli earned income.
Aliyah from 5 November 2025 adds a 5-year exemption on Israeli earnings
Those who made aliyah from 5 November 2025 to 10 February 2027 receive an additional 5-year tax benefit on income earned in Israel from employment or self-employment, the Israel Tax Authority states in its October 2026 leaflet. The benefit does not cover passive income such as interest, dividends, rent or capital gains. The Authority’s April 2026 withholding booklet gives the arrival window as 5 November 2025 to 31 December 2026.
Outside the benefit, Israeli income from work or business meets the ordinary 2026 income tax brackets:
| Annual income | Monthly income | Marginal rate |
|---|---|---|
| Up to NIS 84,120 | Up to NIS 7,010 | 10% |
| NIS 84,121 to NIS 120,720 | NIS 7,011 to NIS 10,060 | 14% |
| NIS 120,721 to NIS 228,000 | NIS 10,061 to NIS 19,000 | 20% |
| NIS 228,001 to NIS 301,200 | NIS 19,001 to NIS 25,100 | 31% |
| NIS 301,201 to NIS 560,280 | NIS 25,101 to NIS 46,690 | 35% |
| Above NIS 560,280 | Above NIS 46,690 | 47% |
Source: Israel Tax Authority, withholding tables from January 2026, updated April 2026. Tax year 2026.
The Israel Tax Authority states that a 3% surtax applies to taxable income above NIS 721,560 a year in 2026, with a further 2% on taxable income from capital sources above the same threshold. On capital gains, the Israel Tax Authority states in its Form 1399 notes for tax year 2025:
- Real gain accrued from 1 January 2012: up to 25%, or 30% for a substantial shareholder selling a security
- Real gain accrued from 1 January 2003 to 31 December 2011: up to 20%, or 25% for a substantial shareholder selling a security
- Real gain accrued up to 31 December 2002: the individual’s marginal income tax rate
No annual cap appears in the Tax Authority’s aliyah leaflet
The Israel Tax Authority publishes no annual shekel ceiling on the 5-year benefit for Israeli earnings in its October 2026 aliyah leaflet. The leaflet carries nothing on an adjustment year, and nothing on National Insurance or health insurance contributions.
What the leaflet states about the 5-year benefit:
- The arrival window, from 5 November 2025 to 10 February 2027
- The length, 5 years
- The income covered, from employment or self-employment in Israel
- The income excluded, interest, dividends, rent and capital gains
What the leaflet publishes nothing on:
- An annual ceiling on the benefit
- An adjustment year
- National Insurance contributions
- Health insurance contributions
The capital gains rates are for 2025, the brackets for 2026
- Every figure on this page is the Israel Tax Authority’s, from three documents: the aliyah leaflet dated 20 October 2026, the withholding tables updated April 2026, and the Form 1399 notes for tax year 2025.
- The 2026 brackets were widened from 1 January 2026 by the Economic Efficiency Law published 31 March 2026. Tables dated before April 2026 carry the earlier brackets.
- Bracket rates are marginal rates on taxable income before credit points, and never the share of income a person pays.
- The 25% is a ceiling on real gain accrued since 2012. A gain that spans periods is split, each part at its own rate.
- The leaflet and the April 2026 booklet give different end dates for the 5-year benefit window.
Questions readers ask
Is foreign rental income taxed for new immigrants?
The Israel Tax Authority states that rent earned abroad is part of the income a new immigrant is exempt on for 10 years. The exemption covers all income earned abroad.
Do new immigrants pay tax on dividends from shares held abroad?
The Israel Tax Authority states that dividends and interest earned abroad are exempt for 10 years for new immigrants and veteran returning residents.
What happens when a new immigrant sells an asset abroad after 10 years?
The Israel Tax Authority states, in its Form 1399 notes for tax year 2025, that the part of the real gain accrued up to the end of the 10 years stays exempt. A sale within the 10 years is exempt on the whole gain.
Do immigrants arriving in 2026 still get the foreign income exemption?
The Israel Tax Authority states that arrivals on or after 1 January 2026 keep the 10-year tax exemption on foreign income. They report that income, which arrivals up to 31 December 2025 do not.
Who is exempt from reporting foreign assets?
The Israel Tax Authority states that those who arrived up to 31 December 2025 are exempt from reporting foreign income and foreign assets for the 10 years.
How much is a tax credit point worth in 2026?
The Israel Tax Authority puts one credit point at NIS 242 a month in 2026, and at NIS 2,904 a year in its aliyah leaflet.
How many extra credit points does a new immigrant get in the second year?
The Israel Tax Authority states that a new immigrant holds 3 additional points from month 13 to month 30 after arrival. The first 12 months carry 1 additional point.
How long do new immigrant credit points last?
The Israel Tax Authority states that the additional points run for 54 months, or 4.5 years, from arrival. The last 12 months carry 1 point.
Does the 5-year benefit cover rental income earned in Israel?
The Israel Tax Authority states that the benefit covers income from employment or self-employment in Israel. Rent, interest, dividends and capital gains are outside it.
Who qualifies for the 5-year benefit on Israeli earnings?
The Israel Tax Authority states in its October 2026 leaflet that the benefit applies to those who made aliyah from 5 November 2025 to 10 February 2027. Its April 2026 booklet gives an end date of 31 December 2026.
What is the top income tax rate in Israel in 2026?
The Israel Tax Authority states that income from work or business above NIS 560,280 a year is taxed at 47% in 2026. A 3% surtax applies above NIS 721,560, so the top marginal rate on such income is 50%.
What tax applies to returning residents on foreign income?
The Israel Tax Authority states that veteran returning residents, abroad more than 10 years, are exempt for 10 years on all income earned abroad. Those abroad for 6 years are exempt for 5 years on non-business income from abroad.
What is the capital gains tax rate in Israel?
The Israel Tax Authority states that real capital gain accrued from 1 January 2012 is taxed at up to 25% for tax year 2025. A substantial shareholder selling a security pays 30%.
Does the aliyah leaflet cover National Insurance?
The Israel Tax Authority publishes nothing on National Insurance or health insurance contributions in its October 2026 aliyah leaflet.
Sources
- Israel Tax Authority, 2026. Considering Aliyah? Here Are Some Benefits You May Be Eligible For. Spokesperson and Public Information Unit, English leaflet, dated 20 October 2026, information valid for 2026. https://www.gov.il/BlobFolder/generalpage/new-immigrants-france-081026/he/IncomeTax_new-immigrants-english-081026.pdf. Official or primary record.
- Israel Tax Authority, 2026. Form 1399 (individual), Notice of Sale of an Asset and Calculation of the Tax Due, Tax Year 2025, explanatory notes. Annual report forms for tax year 2025, dated 19 January 2026. https://www.gov.il/BlobFolder/service/reporting-and-payment-2025-annual-tax-report-for-individuals/he/Service_Pages_Income_tax_annual-report-2026_1399y-2025.pdf. Official or primary record.
- Israel Tax Authority, 2026. Withholding Tables for Income Tax on Salary and Wages from January 2026, updated April 2026. Assessment and Audit Division, dated 15 April 2026. https://www.gov.il/BlobFolder/generalpage/income-tax-monthly-deductions-booklet/he/generalInformation_income-tax-monthly-deductions-booklet_monthly-deductions-booklet-2026.pdf. Official or primary record.
