The document summarizes various tax benefits, relief, and exemptions available for foreign residents, new immigrants, and returning Israelis under Israeli law. This includes a 10-year tax exemption on income earned outside of Israel, no estate or gift tax, exemptions from capital gains and income taxes on various investments and assets, reduced tax rates on rental income, and exemptions from purchase and betterment taxes for new immigrants. Israel aims to be a tax haven for foreign investments and residents through these beneficial tax policies.

1. 2011
Lior Pick & Co.
Law offices
The State of Israel – A Tax Benefit Paradise for Foreign
Residents, New Immigrants & Returning Israelis
Lior Pick, Advocate (CPA (Isr.) TEP
Over recent years, the State of Israel has become a true paradise in all related to
withdrawing foreign capital and foreign residents and new immigrants'
investments. Inter-alia, this is because of a sophisticated taxation system that
grants far-reaching tax benefits and relief as well as an impressive list of
exemptions for foreign residents, new immigrants and returning Israelis.
The aforementioned along with a stable economy, a gradual reduction in
taxation rates and extensive tax agreements (more than 40 agreements), places
Israel as a leader in all relating to investments in technology high tech
companies and real estate assets as well as providing an ultimate framework for
international taxation planning for companies and individuals.
Most important of all, Israel is a secure haven for Diaspora Jews.
The following schedule provides a summary of tax benefits, relief and
exemptions pursuant to Israeli legislation, which can be used legitimately:
1. A tax exemption in Israel on all types of income, earnings and assets
(outside of Israel) for 10 years for new immigrants & returning
Israelis. This exemption is accompanied by an exemption on reporting
the aforementioned earnings, income and assets.
Lior Pick & co Law Offices ‫ליאור פיק ושות''- משרד עורכי דין‬
2 Hanechoshet St., Ramat Ha'chayal,
‫ליאור פיק ושות משרד עורכי די‬
‫הנחושת 2,, רמתהחייל,, תל-אביב, ישראל‬
‫הנחושת 2 רמת החייל תל אביב, ישראל‬
Tel Aviv, ISRAEL +972-3-5105002 :: ‫טלפו‬
Tel: +972-3-5105002 +972-3-5105002 ‫טלפון‬
+972-3-5105025 ::‫פקס‬
+972-3-5105025 ‫פקס‬
Fax: +972-3-5105025 office@pick-law.com:‫דואר אלקטרוני‬
E-mail: office@pick-law.com office@pick-law.com:‫דואר אלקטרוני‬

2. 2. There is no estate tax in Israel, and no gift tax apart from a gift to a
"foreign citizen" of a taxable assets and capital gains in Israel.
3. An exemption from capital gains tax for Foreign Residents on the sale
of securities registered and traded on the TASE by foreign residents
4. An exemption from Capital Gains tax for Foreign Residents on the
sale of shares in an Israeli company (or foreign company, provided that
most of its assets are in Israel), subject to a number of terms and
conditions.
5. An exemption from Income tax on interest on bank's deposits by foreign
residents and/or new immigrants.
6. An exemption from tax for foreign residents on income from interest
and linkage differentials on bonds traded on the TASE (subject to
certain terms and conditions).
7. An exemption from tax on residential rent up to approx. €900 per
month per individual. Alternatively, a reduced tax rate of only 10% on
residential rents (without the deduction of expenses, credits or
exemptions).
8. An exemption from betterment tax in Israel on the sale of an absolved
residential apartment (under certain terms and conditions), once every
four years (or 18 months when this is the only apartment).
Furthermore, there are prescribed tax exemptions on land
swapping, vacating and construction transactions, on certain
transfers as a gift to a relative, on legacies, on transfers from a
trustee to a beneficiary, on transfers to a land association, on
transfers from a land association under dissolution.
New immigrants are entitled to an exemption from purchases tax up
to a sum of approx. NIS 1.4 million (approx. €280,000), as at February
2010 and on the balance they should pay 5%.
Lior Pick & co Law Offices ‫ליאור פיק ושות'- משרד עורכי דין‬
2 Hanechoshet St., Ramat Ha'chayal, ‫הנחושת 2, רמת החייל, תל-אביב, ישראל‬
Tel Aviv, ISRAEL +972-3-5105002 :‫טלפון‬
Tel: +972-3-5105002 +972-3-5105025 :‫פקס‬
Fax: +972-3-5105025 office@pick-law.com:‫דואר אלקטרוני‬
E-mail: office@pick-law.com

3. 9. Section 6 of the agreement between Israel and France (from 1963)
prescribes that the tax on income from property assets (real estate) in
Israel to be paid by a French citizen will only be paid in Israel (the place
and which the land is located). The opposite holds true for an Israeli
citizen who invests in real estate in France.
Section 13 of the agreement adds that earnings produced from
transferring land will be taxed in the engaging country in which the
aforementioned land is located.
10. A low company tax rate (compared with other countries).
In 2011, a fixed rate of 24% - to be reduced by 1% per year until 18% in
2016.
11. Foreign citizen trust – Under certain conditions, no tax liability shall
apply to trusteeships and Israeli citizen beneficiaries.
12. An investment in a REIT fund – An alternative to a direct investment
in real estate, enables distributing the investment over a number of
assets, even when the investments is not high. A further advantage –
negotiability, compared with a direct investment in real estate.
13. An exemption from capital gains tax in Israel for foreign investors in
hedge funds.
The aforementioned contains nothing to serve as an opinion and/or
an alternative to individual legal taxation advice. We will be happy
to be at your disposal for any queries and or explanations regarding
this or any general matter.
Our office specializes in taxation advice (income tax, betterment
tax, VAT) and also accompanies real estate, company and
international transactions.
Lior Pick & co Law Offices Yours sincerely, ‫ליאור פיק ושות'- משרד עורכי דין‬
2 Hanechoshet St., Ramat Ha'chayal, ‫הנחושת 2, רמת החייל, תל-אביב, ישראל‬
Tel Aviv, ISRAEL +972-3-5105002 :‫טלפון‬
Lior Pick & Co. Law offices
Tel: +972-3-5105002 +972-3-5105025 :‫פקס‬
Fax: +972-3-5105025 office@pick-law.com:‫דואר אלקטרוני‬
E-mail: office@pick-law.com