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An overview from Herzog Fox & Neeman, Taxand Israel
Israel has introduced a significant new tax incentive regime aimed at attracting both new immigrants and long-term former residents back to the country. Recent legislation grants eligible individuals a tax exemption on income earned from employment, business and professional services carried out in Israel, marking the first time that new immigrants have received relief on Israeli-sourced income in addition to existing benefits for foreign-source income. The legislation includes several conditions, including reduced relief for income received from related parties and residency requirements designed to encourage long-term relocation to Israel.
The reforms also provide incentives for international businesses. Foreign companies employing eligible immigrants may qualify for exemptions on income generated in Israel through those employees’ activities, helping to reduce permanent establishment risks and encouraging global firms to expand their presence in the country. The government hopes the package will support immigration, attract skilled professionals, and strengthen Israel’s position as a destination for international talent and investment.
Guy Katz and Meir Linzen from our Israeli member firm, Herzog Fox & Neeman provide a comprehensive overview of the incentive criteria and conditions, which you can read here.
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