Tax benefits for new immigrants to Israel

Have you ever wondered why Israel is on the list of one of the most developed countries in the world? Indeed, the speed and themes of development in all areas are striking: from the economy to infrastructure. And the main reason is the support of the state. The state is really interested in developing all spheres of life. But this will not work without a steady increase in the population, people who can work, do business and just contribute.

One of the government programs to support the population is the possibility of reparations. This means that the indigenous population can return to their homeland. And they can’t just move, the most comfortable and favorable conditions have been created for them. That’s how they can move and not be afraid of losing everything at once. They can be sure of help starting a new life. This way they can move freely, even if they have families, because they are confident in their future. Let’s take a closer look at what they can expect under the government program, and how to make the most of it.

Overview of tax benefits for new immigrants

One of the main reasons why the country is developing so rapidly is population growth. Israel really has all the conditions for reparations. This is the comfort of living, well-developed infrastructure and plenty of opportunities to develop yourself and your business. But if this is not enough, the government sets special conditions for those who have just been able to obtain the status of a repatriate.

These are not just bonuses for repatriates, they are ways to make life in a new country more comfortable. The economic situation is getting easier. Yes, and other aspects of life are becoming simpler.

10-year exemption on foreign income

One of the differences that attracts many of those who plan to move here is the long period of tax exemption. In some countries, they offer a couple of years for development, but in Israel this period is much longer. New arrivals can legally avoid paying taxes for ten years. And most importantly, for any income that is received from another state. This even applies to foreign support measures, including pensions.

And even during these ten years, new sources of income appear abroad, and you won’t have to pay for them either. The only condition is only 10 years after the end of the repatriation procedure.

Income tax credits for Israeli-sourced income

One of the bonuses for new arrivals is the opportunity to save on income taxes. And here a smart system has been thought out, where everyone can get their own benefit. Preferential units have been calculated for each of them, which can be used to pay part of the tax. If the initial income is really small, then this becomes a real salvation. You don’t have to save so much for the payment. Although if the salary is too small, and it will not be possible to spend the tax on this aspect, then it will apply to the percentage of investments. This is also provided for by the legislation.

And at the same time, the government understands that the country has inflation and other conditions that affect the economic situation in the country. Therefore, the amount of benefits per unit is growing. There are already 242 shekels per unit. And if you recalculate it to an annual plus, then the bonus can be as much as 2904 shekels. This is already a decent amount, which can make life much easier, especially in the initial stages. However, it is worth remembering that this applies to taxes on all types of income, not just on income from wages at work.

Purchase tax reductions for property buyers

It is clear that buying an apartment is one of the obstacles to moving. Especially if you plan to move with your family. And therefore, even in this regard, we can count on the support of the state.

The help itself is that you can get to pay property tax after buying at a discount. And this is quite a significant bonus, because everyone understands how much housing costs in such a developed and well-equipped country. And you don’t have to buy an apartment at a discount right away. It takes seven years, so you can get a high-paying job and save up for a new home.

And this applies not only to buying an apartment or a house for personal use. This also applies to business premises. This helps to develop your own business in order to get used to the new conditions. And the main advantage is that you can get a discount on your personal apartment and business premises. This is a double benefit.

Adjustment year option for new residents

Another advantage for new residents is the adjustment, which also provides a real opportunity to save money. It is very important to land well and then lead a comfortable life. The adjustment period allows you to slightly change the tax conditions. The validity period is the first year after receiving the status. So, what does this period give, and what benefits can you get?

• Change the tax base for the last billing period. This allows you to take into account all the nuances and get benefits.
• Take in the income period that is before the settlement period. This helps to reduce the tax burden for the specified period.
• Adjust tax obligations.
• Granting the right to special tax rates.

But again, it’s not that simple, because not everyone has the right to such light conditions. The first and main rule is the status of a resident. This status will have to be confirmed officially. The second is to submit an application. But you need to do it right away, because it only takes 3 months. We need to find out which authority makes the decision and send all the documents there. There is a standard documentation package that confirms the possibility to count on these advantages.

And it will also not be possible to adjust if there are any tax debts. Even in the country where they lived before. Here you will have to document that everything is paid on time. If everything was done correctly, then you can count on a recalculation. Sometimes it comes out at a big discount.

Reporting requirements and upcoming changes

A prerequisite for everyone is the need to provide reports. This allows you to monitor the correctness. If there are any violations, then you will no longer be able to count on preferential terms.

The standard package, which must be submitted regularly, includes:

In general, this direction is constantly changing. This is done to make the processes as simple, accessible, and convenient as possible. In addition, it allows for better control of the entire system and prevents violations. More adjustments in this area are planned in the future:

Additional benefits for returning residents

We talked about the main advantages that can be obtained after receiving the repatriation status. But there are also additional privileges that are guaranteed to new residents.

• When selling property, you will not have to pay tax. You can buy a new apartment, expand your business premises, and you won’t have to overpay. This is very beneficial because the tax on the sale of real estate is not so small.
• Income is taxed according to the grace period. Simpler terms.
• Moving is not only easy, but also profitable. But the government compensates for the costs. This simplifies the process of returning to the country. Everyone arrives happy and ready for new successes in a new life.
• If it is not possible to buy an apartment right away, then you can benefit from renting a home. Rent subsidies allow you to pay for the rental of housing and save for the purchase of your own housing also on preferential terms.

All these privileges are available only to those who have the appropriate status, those who submit all documents on time. And most importantly, those who live by the laws of Israel.

How to apply for tax benefits

Before submitting an application, it is necessary to prepare the entire standard package of documents. If you don’t have at least one paper, you won’t have to expect to receive benefits. And it’s worth remembering that there is a limited period, so it’s worth collecting all the documents at once.

• The passport and the certificate of the resident.
• Income statement.
• Documents that officially confirm the right to benefits.
• The tax return for the previous period.
• Documents on marital status.

The process itself takes place in four stages:

1. Collecting documents and filling out the application.
2. Sending the entire package of papers to the tax authority.
3. Confirmation that the application has been accepted.
4. Waiting for a decision.

It usually takes up to 30 days, although the first time everything is checked faster in a couple of weeks. And if additional documents and confirmations are required, then you will have to wait 45 days.

If the package is complete, the deadlines are met and everything is in order, then you won’t have to wait. The benefits will help you settle in the country. This is a profitable step into a new life. And the government strongly supports your decision.