Are you planning to make aliyah in 2026? With the myriad things you need to consider, you may want to add this important piece of information to your list: Israel’s Tax Authority has announced significant changes in tax reporting requirements that will directly impact all new immigrants and returning residents as of January 1, 2026.
Currently, olim and returning residents benefit from a double advantage. They are not taxed, nor are they required to disclose foreign income or holdings to Israeli authorities. This had raised concerns with the OECD, which warned Israel that it would risk being labeled as a tax haven if it did not revise its reporting, transparency, and information exchange policies.
While the resulting revisions create additional filing requirements for newcomers and citizens returning from abroad, it adds a layer of transparency to the country’s tax framework and meets international transparency standards set by the OECD.
While the longstanding tax exemption on foreign-sourced income will remain intact, those who establish residency in Israel in 2026 will have to report any overseas income and assets to the Tax Authority.
What’s changing: What will be reported
The new legislation introduces several key amendments, including:
Mandatory reporting: Despite the continued tax exemption on foreign-sourced income, new olim and veteran returning residents will be required to report their non-Israeli income and assets. The exact scope and format of this reporting have yet to be determined by the authorities.
Financial statements for foreign entities: Tax officers will have the authority to demand financial statements from non-Israeli companies under your management, and you will need to prepare annual financial statements in accordance with Israeli Generally Accepted Accounting Principles (GAAP).
Trusts transparency: Reporting exemptions will be removed for trusts with new immigrants or veteran returning residents as settlors or beneficiaries, necessitating disclosure of relevant trust information.
It’s essential to understand that while you will be obligated to report foreign income and assets, tax exemptions on that income will remain in place. This means that although you must disclose your global financial information, new olim and veteran returning residents will not be taxed on it during the exemption period. The new legislation will actually be activated in 2027, when taxes for 2026 will be reported.
Steps you can take now
Stay informed: Keep up with news of the specific reporting requirements from the Israel Tax Authority.
Consult a professional: Speak to tax advisers or legal professionals who are experienced in Israeli tax law to understand how the changes may affect you financially.
Plan accordingly: If you’re contemplating aliyah or are a returning resident, factor these reporting obligations into your decision-making and timeline.
You will be better prepared and enjoy a smoother transition in your aliyah experience if you plan ahead and get a head start on understanding Israel’s tax regulations.
The writer is the founder of Living Financially Smarter in Israel and a trusted adviser to its 40,000 members. She is a certified financial planner (CFP®), author of Smarter Israeli Banking, and a member of Israel’s Financial Planning Association and the Israeli Union of Home Economic Advisers. The third annual Living Financially Smarter in Israel Conference is Sunday, June 15, at Nefesh B’Nefesh in Jerusalem.