I have to declare = I'll pay taxes?

No. Declare ≠ pay. The tax exemption on foreign income remains complete for 10 years. The declaration simply gives the tax authority oversight.

I rent out a French apartment for €1,500/month. What do I do?

From 2026, you declare this income annually to the Israeli tax authority. You pay no Israeli tax on it for 10 years. In France, you continue to pay French taxes if applicable.

I have a limited company in France. Is that a problem?

Potentially yes if you manage it from Israel. Consultation with a specialist tax accountant is MANDATORY.

Do I need an Israeli accountant?

If your situation includes foreign companies, significant income, or real estate abroad — yes, absolutely. For a simple pension or rental income, an accountant can also help secure your reporting file.

Does the reform apply if I made Aliyah in 2024?

If you arrived before December 31st, 2025, you benefit from the old regime (no reporting obligation) for the remaining duration of your 10 years.

Back to home

🔥 New 2026

Olim Tax 2026 — What Really Changes.

Mandatory declaration ≠ taxation. Understand the reform in 5 minutes.

Educational guide

This guide is for educational purposes only. Every financial situation is unique — consult a tax professional specialised in international taxation before making any decision.

Key takeaways

Before 31 Dec 2025

Tax exemption on foreign income
No obligation to declare
Full discretion on foreign assets

From 1 Jan 2026

10-year tax exemption maintained (UNCHANGED)
Obligation to DECLARE foreign income (NEW)
Transparency on foreign assets and companies (NEW)

👉 Declare ≠ Pay. The tax exemption remains intact.

What stays — the 10-year exemption

The 10-year exemption on foreign-source income is MAINTAINED for all Olim, including those who arrived after January 1st, 2026.

Income still tax-free

Rental income from foreign properties
Dividends from foreign companies
Foreign bank interest
Capital gains on foreign asset sales
Foreign pensions and annuities
Various passive income

Concrete example

An Oleh who arrived on March 15th, 2026, earning €2,000/month in rent from a French apartment, must DECLARE this income to the Israeli tax authority, but will NOT pay any tax on it in Israel for 10 years.

What changes — the reporting obligation

From January 1st, 2026, annual obligation to declare:

1
All foreign-source income
rents, dividends, interest, pensions, foreign salaries
2
All foreign assets and holdings
bank accounts, real estate, company shares
3
Foreign companies and trusts
note: the tax authority will check if a foreign company is managed from Israel

Why this reform?

Israel committed to automatic exchange of banking information (CRS) with 147 countries (OECD standard). This reform responds to OECD and EU pressure to avoid Israel being placed on the international tax blacklist.

Before vs after comparison

Situation	Before 2026	From 2026
Foreign rental income	Not declared	Declared, not taxed
Foreign dividends	Not declared	Declared, not taxed
Foreign pension	Not declared	Declared, not taxed
Foreign bank account	Not declared	Asset to declare
Foreign company	Not declared	Declare + analysis
Tax on this income	0%	0% (unchanged)

Traps to avoid

Not declaring thinking "nobody will know"

Israel automatically receives banking data from 147 countries via CRS. The tax authority ALREADY KNOWS. Not declaring = risk of losing ALL benefits retroactively + penalties.

Confusing active income with passive income

The tax authority will verify whether income declared as 'passive' (rent, dividend) is actually 'active' (disguised commercial activity). If reclassified = taxable.

Managing a foreign company from Israel

A foreign company managed and controlled from Israel can be reclassified as an Israeli company = normal taxation. Expert consultation is MANDATORY.

Ignoring the 'shnat histaglut' (adaptation year)

Some Olim can elect not to be treated as Israeli tax residents during their first year. This decision must be planned BEFORE with a tax advisor.

Who is affected?

Olim who arrived AFTER January 1st, 2026

→ Reporting obligation + 10-year tax exemption

Olim who arrived BEFORE December 31st, 2025

→ Old regime maintained (no declaration, no tax) for the remaining duration of their 10 years

Toshavim Chozrim (returning residents)

→ Same rules as Olim Hadashim based on return date

FAQ

Official links and resources

Israeli Tax Authority (Mas Hachnassa) OlimAid professional directory Olim benefits guide Tofes 101 guide

Your situation is unique — get expert guidance

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