Smotrich plans 0% revenue tax for brand new immigrants

Minister of Finance Bezalel Smotrich and Minister of Aliyah and Integration Ofir Sofer have offered a brand new initiative during which new immigrants and returning residents that immigrate to Israel in 2026 will take pleasure in main tax advantages.

The tax profit shall be graduated with a zero tax price making use of to immigrants and returning residents in 2026 and 2027 on their revenue in Israel, with the tax price regularly growing to 30% till 2030. At the moment, there’s a tax exemption for brand new immigrants on revenue earned overseas for 10 years, underneath the regulation often called the “Milchan Regulation,” however not on revenue earned in Israel.

That is an initiative that the Minister of Finance first revealed at a convention of the Tax Advisors Affiliation two weeks in the past, stunning Ministry of Finance and Israel Tax Authority senior officers when he stated that he intends to encourage immigration to Israel by exempting new immigrants from tax on revenue earned in Israel. Smotrich then met with Tax Authority chief Shay Aharonovich to formulate particulars of the brand new tax break.

The tax reform for brand new immigrants shall be accredited as a part of the state funds Smotrich offered this week, as a part of which main tax advantages shall be granted to new immigrants and returning residents, together with the next tax charges: 2026 – 0%. 2027 – 0%; 2028 – 10%; 2029 – 20%; 2030 – 30%.

An revenue ceiling has been added to the reform, and it has been set that it could apply as much as a ceiling of NIS 1 million per 12 months. Above this ceiling, the common tax charges shall be paid in line with the marginal tax brackets.

The transfer is one in every of a sequence of measures promoted by the Minister of Finance and the Minister of Aliyah and Integration, as a part of a nationwide effort to encourage immigration and integration into Israeli society and the economic system.

The Ministry of Finance explains the profit is required to encourage immigration to Israel as a result of rise in anti-Semitism all over the world and modifications in tax coverage in Western nations just like the UK. Based on the Ministry of Finance, this system will strengthen the Israeli economic system by encouraging the immigration of Jewish professionals, entrepreneurs, and businesspeople from all over the world, and can facilitate their integration into Israeli society and the economic system.

Alongside this profit, new immigrants will proceed to be eligible for advantages presently out there to new immigrants and returning residents, resembling tax exemption for revenue generated outdoors of Israel for 10 years from the date they develop into residents of Israel and tax credit.

On January 1, 2026, the exemption for brand new immigrants and returning residents from reporting their revenue overseas for 10 years shall be abolished.

The exemption turned regulation in 2018, as a part of the tax reform referred to as the “Milchan Regulation” and granted new immigrants and returning residents an exemption from each paying taxes and reporting on property and revenue originating outdoors of Israel for 10 years after turning into residents of Israel. Nonetheless, as a part of new laws that can come into impact at the start of this 12 months, the exemption from reporting has been abolished.

2026 will see revolution in immigration

Smotrich spoke in regards to the reform at an occasion held in collaboration with the Nefesh B’Nefesh, attended by Sofer and Aharonovich. He stated, “Zionism has at all times rested on three issues – Settlement, safety and immigration. We’ve invested closely in safety within the final two years, and with God’s assist the State of Israel is now in a distinct place. In settlement, we’re making a revolution – Judea and Samaria, South and North – Negev, Galilee and Golan. 2026 shall be a 12 months of revolution in immigration. Not as a slogan however as a sensible work plan. I name on the Jews within the Diaspora and Israelis – come residence.”

Sofer added, “Within the final three years, we now have been altering and strengthening the infrastructure for immigration and integration. At the moment, we’re including a big and vital layer to the nationwide motion to encourage immigration. This can be a skilled, wide-ranging and data-based transfer, which goals to make sure optimum integration for brand new immigrants, create an actual alternative for them to combine into Israeli society, and on the identical time contribute to the expansion of the Israeli economic system.”

Printed by Globes, Israel enterprise information – en.globes.co.il – on November 6, 2025.

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