Israel’s 2026 Tax Incentives and disclosure requirements: The Aliyah Decision That Will Shape Your Financial Future

“In this world, nothing can be said to be certain, except death and taxes,” Benjamin Franklin famously observed. Yet for those contemplating aliyah, taxes have now become a matter of choice.

Last week, as part of the 2026 State Budget, the Israeli government announced a landmark reform that fundamentally reshapes the financial landscape for new immigrants (olim) and returning residents. Those who move to Israel after 5 November 2025 and before 31 December 2026 will enjoy an unprecedented array of aliyah tax incentives — not only on their foreign income, but now on their Israeli income too.

However, as with all major tax reforms, there is a sting in the tail: Anyone arriving after 31 December 2025 will face a new disclosure requirement on all worldwide assets to the Israel Tax Authority.

These proposals still require approval by the Knesset, and further political negotiation is likely. But the direction of travel is unmistakable: Israel has completely rewritten the fiscal calculus of aliyah.

Why Timing Matters: disclosure vs aliyah tax incentives

Under the existing rules, olim who arrive before 31 December 2025 preserve a crucial aliyah tax incentive: They do not have to report or disclose foreign assets for 10 years.

This means:

• No disclosure of offshore trusts

• No reporting of foreign companies

• No reporting of international bank accounts

• No questions regarding foreign property

• Complete privacy over foreign wealth

For high-net-worth individuals and those with complex offshore structures, this 10-year veil of privacy is often as valuable as the aliyah tax incentives themselves.

What Changes on 1 January 2026?

A completely new regime begins.

1. A 10-Year Exemption on Foreign Income (Still Preserved)

   Olim will continue to enjoy a full exemption on foreign income for ten years.

2. A Ground-Breaking New Exemption on Israeli Income

   For the first time, Israel is offering:

   A two-year exemption on Israeli-source income up to NIS 1 million  (2026–2027)

   Followed by a reduced rate of

   • 10% in 2028

   • 20% in 2029

   • 30% in 2030

This goes far beyond the traditional aliyah tax incentives. As Finance Minister Bezalel Smotrich put it, this is a “revolution” in immigration policy.

A professional earning NIS 600,000 in 2026 would save more than NIS 150,000 in tax in their first year alone — an extraordinary incentive.

The Cost: Total Transparency and Disclosure

For decades, Israel was the global outlier that allowed new immigrants not only significant aliyah tax incentive but also to avoid disclosure foreign assets. The OECD has been pressuring Israel for years to bring its system into alignment with international standards.

That era is ending.

From 1 January 2026, new immigrants will need to:

• File annual Israeli tax returns

• Disclose all global income and assets

• Report any foreign companies, trusts, and partnerships

• Disclose cryptocurrencies and digital assets

• Provide details of foreign management structures

In short, the Israel Tax Authority will gain full visibility into structures that were previously beyond its reach.

And under the OECD Common Reporting Standard, Israel may automatically share such data with other jurisdictions. The authority will also be empowered to question whether a foreign company is effectively managed from Israel — triggering possible Israeli tax liability.

For individuals with meaningful foreign wealth, this is a paradigm shift.

The Strategic Choice: Privacy vs. Aliyah Tax Incentives

The decision now facing would-be immigrants is stark:

• Move before 31 December 2025→ retain 10 years of financial privacy plus tax exemptions

• Move from 1 January 2026 onwards→ gain unprecedented Israeli tax incentives,→ but give up privacy and embrace full global disclosure

  
  

As Sartre observed, “we are our choices.” The choice of when to immigrate to Israel will shape the financial dimension of one’s aliyah for a decade or more.

Act Quickly: The Window Is Closing

The clock is ticking.

• Privacy ends on 31 December 2025.

• The new paradigm starts on 1 January 2026.

The months ahead represent one of the most consequential decision points in the history of aliyah taxation.