AN UNDERUTILIZED BUT LEGAL OPPORTUNITY

Did you know that the date you receive Israeli citizenship does not automatically determine your tax residency status? Many confuse the administrative status of “citizen” granted by the Ministry of the Interior with the fiscal definition of residency, based on entirely different criteria.
If you made an administrative Aliyah or obtained citizenship before physically relocating to Israel, it is often possible to defer your tax residency start date.
This mechanism, although not widely known, is legally recognized by the Israeli tax authorities as long as it is properly justified.

HOW IS TAX RESIDENCY DETERMINED IN ISRAEL?

Contrary to popular belief, citizenship is not the main factor. Tax residency is defined based on several objective criteria, including:

• Your physical presence in Israel (number of days per year)
• Your center of life (home, family location, children’s schooling, etc.)
• Your economic and social ties
• The actual date you left your country of origin

If you remained abroad after obtaining Israeli citizenship and only moved to Israel a year or two later, you may qualify for an official deferral of tax residency.

WHAT ARE THE TAX ADVANTAGES?

Deferring your residency can save you thousands of euros by extending your Oleh Hadash benefits, such as:

• 10-year exemption on foreign-sourced income (dividends, rental income, pensions, capital gains, etc.)
• No requirement to declare foreign assets during that period
• Reduced risk of audit or conflict thanks to a justified, clarified status

This is a strategic advantage for anyone with assets or income abroad at the time of making Aliyah.

IMPORTANT TO KNOW

This mechanism is neither automatic nor retroactive. It requires :

• A detailed review of your personal and fiscal situation
• A comprehensive file with supporting documentation: proof of foreign residence, bills, foreign tax records, school enrollments, etc.
• Respect for declaration deadlines, especially if you are already living in Israel
A single mistake or rushed declaration could cancel your 10-year exemption rights.

ASSULINE & CO: A TAILORED SUPPORT

For over 25 years, Assuline & Co. has been advising Olim Hadashim, families, and entrepreneurs in cross-border tax matters.
We help you:
• Assess your eligibility for a legal deferral of tax residency
• Build a strong file to present to the Israeli tax authority
• Preserve and secure your 10-year tax exemption rights
• Respond effectively to tax audits or inquiries.

Our approach is confidential, strategic, and meticulous.