What changed — and what didn't
| Until now (residents before 2026) | Residents from 1.1.2026 | |
|---|---|---|
| Tax on foreign income | Exempt for 10 years | Still exempt for 10 years (unchanged) |
| Reporting foreign income | Exempt from reporting | Must be included in the annual return — even though exempt from tax |
| Foreign assets (capital declaration) | Exempt | Must be declared when a capital declaration is required |
The change was legislated in 2024 (cancelling the reporting exemptions in Sections 134B and 135(b) of the Ordinance), largely in response to international tax-transparency standards. The Tax Authority's implementing circular is still in draft — practical details may be refined.
Who is affected
- New olim — anyone becoming an Israeli tax resident for the first time on or after 1 January 2026.
- Veteran returning residents — generally, Israelis returning after 10+ years abroad, becoming residents on or after that date.
- Adjustment-year cases: under the draft circular, someone who arrived earlier but elected the adjustment year (שנת הסתגלות) and was treated as a foreign resident until after 1.1.2026 may fall under the new rules. Timing questions like this are exactly where professional advice pays.
- Not affected: those who became residents before 2026 generally keep the old reporting exemption for the remainder of their own 10-year period.
What you'll actually have to report
In broad terms, from tax year 2026 the affected individuals file like ordinary residents:
- Annual tax return — including foreign-source income (dividends, interest, rent, business income) even though it is exempt under the 10-year benefit;
- Capital declaration (הצהרת הון) when demanded — covering worldwide assets: foreign bank and brokerage accounts, pensions, company holdings, real estate;
- The first annual returns under the new regime generally cover tax year 2026, filed during 2027.
The practical reality: the work is mechanical — an accurate inventory of what you own abroad, mapped to Israeli forms. It is painless with organized records and miserable without them.
If you're planning aliyah — prepare now
- Inventory your foreign holdings before the move: accounts, brokers, pensions, companies, properties.
- Collect statements and cost-basis records — they are much easier to obtain while you're still a local client.
- Complex holdings? (trusts, closely-held companies, crypto) — get advice on timing and structure before becoming a resident, from a licensed Israeli professional.
- Own or plan to buy Israeli property? That side has its own rules — see our guides to rental income tax, purchase tax and capital gains.
Filing under the new rules — with a licensed professional
This site is an independent information resource — not a tax firm, and it does not represent taxpayers before the Israel Tax Authority. First-year filings under Amendment 272 should be handled with a licensed Israeli tax professional (CPA / licensed tax representative). Tell us about your situation and we'll point you in the right direction.
Get pointed to a licensed professionalFrequently asked questions
Do new olim still get the 10-year tax exemption?
Yes. The 10-year exemption from Israeli tax on foreign-source income (Section 14 of the Income Tax Ordinance) was not cancelled. What changed under Amendment 272 is the reporting side: olim and veteran returning residents who become Israeli residents on or after 1 January 2026 must now report their foreign income and assets to the Israel Tax Authority, even though that income remains tax-exempt.
Who exactly is affected by Amendment 272?
Individuals who become Israeli tax residents for the first time (new olim), and veteran returning residents (generally, those who were abroad ten years or more), on or after 1 January 2026. Those who became residents before that date generally keep the old reporting exemption for the remainder of their 10-year period. Under the Tax Authority's draft guidance, someone who chose an adjustment year and was treated as a foreign resident before 1.1.2026 may fall under the new reporting rules — timing questions like this deserve professional confirmation.
What do new olim have to report from 2026?
In broad terms: an annual tax return that includes foreign-source income (even income that is exempt under the 10-year benefit), and capital declarations covering assets held abroad — such as bank and brokerage accounts, pensions, company holdings and real estate — when required. The exact scope and forms are being finalized in Tax Authority guidance, so the practical details may still evolve.
When is the first report due?
The new reporting duty applies to those becoming Israeli residents from 1 January 2026, so their first annual return generally covers tax year 2026 and is filed during 2027. A capital declaration is filed when the Tax Authority demands one. Exact deadlines depend on the individual case and any extensions that apply.
What should I prepare before making aliyah?
Build a clean inventory of what you own abroad before you arrive: account statements for banks, brokerages and pensions, ownership documents for companies and real estate, and cost-basis records for investments. Reporting is mechanical when the records are organized — and painful when they are not. If you have complex holdings, get advice on timing and structure from a licensed Israeli tax professional before the move.