For many years, Israeli law has allowed new immigrants and returning residents after prolonged absences to refrain from reporting income and assets held overseas to the Israeli Tax Authority. Over time, the OECD has raised concerns, warning that if Israel does not revise its policies on reporting, transparency and information exchange, it risks being categorized as a tax haven.
In early 2024, the Finance Ministry published a draft amendment to the Income Tax Ordinance aimed at implementing international standards set by the Global Forum on Transparency and Exchange of Information for Tax Purposes (operating under the OECD). This amendment introduces new reporting obligations for new immigrants and returning residents, increasing the transparency of Israel’s tax system.
By April 2024, this draft was ratified into law, preventing Israel from being included on a global blacklist of tax haven nations.
The new amendment fundamentally alters the long-standing exemption. Starting January 1, 2026, new immigrants and veteran returning residents who qualify as Israeli tax residents will no longer be exempt from reporting income and assets held abroad. They will be required to file tax returns in Israel that disclose all global assets, including companies, real estate, bank accounts, cryptocurrencies, and more.
The year 2025 will serve as the final opportunity for individuals - new immigrants and long-term returning residents - to return to Israel while maintaining their reporting exemptions under the pre-amendment rules. Given the significant impact of this amendment, we have outlined its primary implications below.
1. Immediate tax return filing upon returning to Israel
Many new immigrants and veteran returning residents come to Israel with significant assets, primarily located abroad. Even under the new amendment, income earned abroad by new immigrants will remain exempt from Israeli taxation. However, they will likely be required to file an annual tax return in Israel. For example, individuals may need to file if their foreign-held assets exceed 2,086,000 NIS (an amount subject to annual adjustment) or if they have established a company in Israel. These tax returns must disclose all global income and assets.
While the tax return itself might not seem overly burdensome, the implications of filing can be significant. For instance, the Israeli Tax Authority might request documentation related to foreign companies owned by new immigrants or returning residents, particularly concerning the location of income generation. This could challenge the taxpayer’s claim and result in Israel taxing the income by asserting that the foreign company has a "permanent establishment" in Israel.
2. Revised Form 150: What you need to know
While not directly related to this amendment, the Tax Authority has recently revised Form 150, a change that could greatly affect new immigrants and returning residents who become Israeli tax residents starting in January 2026. Form 150, required as part of annual tax returns for individuals with interests in foreign companies, has been significantly expanded. The updated version now encompasses a wider range of entities, including companies (even those considered tax-transparent in other jurisdictions) and business partnerships.
The updated form requires detailed information about the foreign company's operations, ownership structure, and any structural changes.
As of January 2026, individuals who become Israeli tax residents must submit this form regarding their foreign-owned companies, as part of their annual tax returns, unlike those arriving before this date, who will remain exempt.
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3. New reporting, new questions
The Israeli Tax Authority is known for its sophistication and strict demands. It’s likely that the new reporting requirements will prompt a deeper examination of taxpayer files, focusing on details previously beyond the Tax Authority’s reach. This approach could lead the Tax Authority to adopt new positions, potentially challenging existing norms and reshaping reporting and income policies for individuals and corporations.

4. Cross-border information exchange
Another key aspect of this amendment involves international information exchange. Israel is a participant in the Common Reporting Standard (CRS) agreement, which enables countries to request information about individuals from foreign nations. The amendment means that data obtained by the Israeli Tax Authority will include extensive details about individuals, which could be shared with authorized bodies in other countries upon request.
5. Beneficiaries of a trust? It affects you either
The new reporting obligations apply not only to individuals but also to trusts. Trusts with beneficiaries entitled to the status of new immigrants or returning residents will now be required to report. This includes trusts established to provide benefits for new immigrants, which will face expanded reporting obligations under the updated law and Tax Authority requirements.
6. Thinking of moving back? Don’t wait until the last minute
If you’ve decided to immigrate or return to Israel, it’s advisable not to wait until the final months of the year. Due to the anticipated legislative changes, the Tax Authority might classify you as a non-resident for all of 2025 and consider your official immigration or return date as January 2026. This decision could affect your reporting obligations and eligibility for benefits as a new immigrant or returning resident. Acting sooner rather than later can mitigate these risks.
We believe taxes should not dictate your life decisions; instead, your lifestyle should guide your tax planning. However, if you’re considering immigrating to or returning to Israel, it’s essential to be aware of these impending changes. Acting now, while the old benefits remain in place, could help avoid unnecessary complications and financial surprises in the future.
- Adv. Amit Gottlieb is a Senior Partner and Head of the Private Wealth and Trusts Department, while Adv. Dvir Saadia is a Partner at YETAX Law Firm.