Israel proposes dramatic changes to tax residency rules

Israel’s Ministry of Finance has released draft legislation that would shift its tax residency test from a subjective “centre of life” approach to a rules-based, day-count system.

Under the proposal, an individual will become tax resident if:

• they spend 75 days in Israel in the current year and have at least 183 weighted days over three years, or

• they spend 30 days in the current year and 140 weighted days over three years, where their spouse is an Israeli tax resident.

For South Africans with strong ties to Israel, the window to act is now. Proper planning, including making aliyah and formal financial emigration from South Africa where appropriate, is essential to ensure that families can continue to maintain their cross-border lives while taking full advantage of Israel’s tax incentives and avoiding the costly trap of falling into multiple tax nets.

Read my full article in the SA Jewish Report here.