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In a nutshell:
' When does the famous "10-year period" start? tax benefits?
' Can we postpone this famous date? (and therefore extend the benefits that go with it)?
' Masloul Yarok A solution that extends the tax-free period by 10 years and allows Olim Hadashim to start the 10-year tax-free period on the actual date of Aliyah, rather than on the date indicated on the Teoudate Olé.
Postpone the tax date of your arrival in Israel
Many people have taken Israeli nationality in the last 15 years, but have not yet become Israeli citizens. established for tax purposes in Israel.
There are many reasons for this "no-show":
- Prolonged professional activity in France.
- Part of the family has remained outside Israel, making it "difficult" to really make the transition.
- Alya who has not succeeded personally or professionally.
- Need to return to France to care for a sick relative.
The list goes on and on, and every person who hasn't moved to Israel will certainly have his or her own reason.
In the meantime, the Israeli tax authorities automatically receive the date of arrival in Israel (from the Ministry of Aliyah), so from a technical point of view, the 10-year counter starts when the Teoudate olé is obtained.
So, a priori, the 10 years of tax benefits granted to an olé hadash start on the day he obtains Teoudate Olé, and end 10 years later (10 calendar years).
I wasn't able to take advantage of the tax benefits for an Olé Hadash, what should I do?
We therefore understand that some people who have taken out nationality without actually settling in Israel find themselves penalized.
On the one hand, they continued to declare all their income abroad (in their country of tax residence): France, Belgium, Switzerland etc... and therefore paid taxes.
On the other hand, their 10 years of tax exemption continued to run, without them really being able to take advantage of it!
These are the people concerned by this article, the people who were unable to take full advantage of the 10-year tax holiday.Read also: How do you declare your income as a retiree in Israel?
The government proposes to extend the tax-free period for an Ole Hadash
Fortunately, there is a solution for those who have not been able to benefit from the tax advantages granted to an Olé Hadash.
Provided they meet the criteria dictated by the government, an Ole Hadash who decides to move to Israel several years after "taking" nationality, will therefore be able to extend his or her tax-exempt period and thus benefit from the "10-year tax exemption" for an Ole Hadash.
Let's take a look at the main criteria to be met, Here is a reminder of the tax benefits available to an Ole Hadash during the 10 years following his tax installation in Israel :
- Exemption for business income generated outside Israel.
- Exemption on dividends received via a company outside Israel.
- Exemption on interest, capital gains and dividends from stock market products, provided the securities are foreign securities.
- Exemption on rental income and capital gains on property located outside Israel.
- Tax exemption on pension income.
Generally speaking, the main distinction is that income from "passive" sources is fully tax-exempt in Israel.
For income generated in Israel (business activity, for example), there are other advantages linked to the status of an Ole Hadash.Read also: How to reduce capital gains tax in Israel?
What are the criteria for extending the 10-year tax-free period?
The main items to be checked by the Israeli tax authorities are :
- What are your reasons for staying outside Israel and not moving here?
- How many days have you spent in Israel during the 10 years preceding this application to extend the tax-free period (you and your spouse).
- Have you continued to declare your income abroad? (For example, have you continued to pay taxes in France).
- Did you have an apartment in Israel at your disposal?
- Did your children continue to attend school outside Israel?
- Have you kept your main residence abroad?
- Do you still do business in your country of residence?
- Have you benefited from the tax advantages associated with being a new immigrant (Bitouah Léoumi - Social Security Coverage, Koupat Holim, Sal Klita etc...).
- Did you indicate when you "arrived" in Israel that you did not wish to be considered an Israeli tax resident?
The list is not exhaustive, and the tax authorities reserve the right to verify additional items.
Masloul Yarok - Shifting the tax exemption period for an Ole Hadash
The Israeli tax authorities allow new immigrants to Israel to defer their tax-exempt status for up to 10 tax years.
This is beneficial for those who were unable to take advantage of the 10-year tax exemption, because they did not take out citizenship before actually settling in Israel.
Example: You took out citizenship in 2013, and moved to Israel in 2022.
If you don't take this step, the Israeli government will automatically terminate your tax-free period in 2023.
If you file to shift the start date of the tax-free period, the 10 years will end in 2032. All income earned during this period will be fully tax-exempt in Israel.
Postpone the date of your tax installation in Israel.
We offer you a simple, straightforward solution: postpone the date on which your tax liability is determined (a process known as "Masloul Yarok") and therefore postpone the date on which you pay income tax in Israel.
As each subject is unique, we recommend that you consult an Israeli tax specialist, who will analyze your needs in detail and optimize your tax situation in Israel.
Dray & Dray, specialists in Israeli taxation, will take care of all the formalities for you to benefit from the 10-year tax exemption granted to an Olé Hadash.
The "Dray & Dray" accounting firm is based in Jerusalem & Tel Aviv.
We provide day-to-day support for your accounting and tax affairs in Israel.
We also have an English-speaking department specializing in business start-ups and accounting issues in England.
Finally, the firm's real estate department handles tax optimization and real estate issues for owners and investors in Israel.
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