Home » Law » Tax Benefits of Returning Senior Residents Waiting in Israel

Over the last couple of years Israel has become an enticing jurisdiction for tax planners, the following article will give information on some of the tax benefits which new immigrants or returning residents can get.

Definition of a new immigrant:

A new immigrant is an individual who became a local of the state of Israel for the first time and was never before a native of the state of Israel.

Definition of a returning senior resident:

An individual who returned and became a of the state of Israel after being a foreign citizen for 10 successive years at least. As an incentive during the celebrations of Israel’s 60’s anniversary it has been stated in a temporary order that a person who returned and became a resident of the state of Israel during the tax years of 2007-2009 will be regarded a returning senior resident even if he was a foreign resident for 5 successive years at least as long as he was regarded a foreign resident upon the 1.1.2007.

The benefits:

1. According to a San Diego Probate lawyer, the tax reform awards for the first time to new immigrants in a unified way an exemption for all the incomes which are made outside of Israel. For 10 years beginning the day of landing to Israel. The exemption consists of the whole incomes weather passive or active, weather coming by realization of property or investments outside of Israel or whether it was received from current foreign incomes.

2. In case the new immigrant owns a foreign corporation that is being managed by the new immigrant or in case he is a share holder, it will not be regarded an Israeli resided corporation and the Israeli taxation will not apply by default. This way the corporation will be able to proceed producing non taxable incomes in Israel as long as those incomes are not generated in Israel.

3. New immigrants will experience full tax exemption over their pension.

4. In the first year and a half upon the landing to Israel new immigrants will receive 3 credit points. In the following year they will receive 2 credit points and in the final year 2 extra credit points.

5. On income generated from interest coming from a foreign currency deposit there will be a tax exemption for 20 years conditioned that the source of the deposit is in finance which the new immigrant had before becoming a new immigrant and were entrusted in an Israeli financial institution, said San Diego Estate Planning Lawyer, Steve Bliss ESQ.