As you know, after introducing of amendment #168 of 01.01.2007 into Israeli law on income taxation, the new immigrants and citizens who have returned back to the country from abroad are eligible for exemption from taxes on income and assets earned outside Israel over a period of 10 years. The same amendment exempts new immigrants and returning citizens from filing reports on their income earned abroad for the same 10 years.
Under the pressure of OECD (the Organization for Economic Cooperation and Development), a member of which Israel became 07.09. 2010, it is proposed, within the framework of the draft Law on National Economy Arrangement published 11.06.2013, to cancel the exemption of new immigrants and citizens returning back to the country from filing statements on income and assets obtained abroad, as stipulated in amendments #134 and 135 to the Regulations on the Income taxation (hereinafter: the “Regulations”).
At the same time, according to the mentioned draft Law, this measure (the exemption of tax reporting) will be applied to new immigrants and returnees since 01.08.2013 only. It should be noted that the income tax exemption will be valid as before, i.e. within 10 years.
The new Law proposes to cancel all exceptions concerning above mentioned exemptions and to extend the law onto immigrants and returning citizens who arrive in the country started from the date specified in the draft of the Arrangement Law, i.e. since 01.08.2013.
In light of this far-reaching decision to cancel the exemption from reporting, and taking into account its importance for some new immigrants we highly recommend for those who are planning to repatriate or return back to Israel in the near future, to consider the possibility of the repatriation or return until 31.07.2013.
We will be happy to advise you on this issue and to provide with legal assistance.
Lior Pick & Co. Law Offices
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