Returning residents
The counting of the years begins on the date of complete termination of residency for income tax purposes and not on the date of departure ("boarding the plane"). We were a person who had to prove that he was classified as a foreign resident and that he cut off his residency after immigrating for the entire period. It is not enough to prove a person's place of residence abroad in order to be classified as a foreign resident, but it is required to prove complete separation of residency from Israel for at least ten years in order to receive the rights and tax benefits that are granted by virtue of the status of "old returning resident".
The earlier the test is done for you, the more room and flexibility there is for changes. Checking the status after returning to Israel can be "too late" and critical for obtaining approval and eligibility for exemptions by virtue of the Income Tax Ordinance, so our recommendation is to check ahead of time whether you meet the definition of "returning resident" or "returning resident" while you were abroad already when you formed the decision to return to Israel.
Through supporting documents and information that the individual attaches to the application. In order to obtain certainty regarding eligibility, it was determined that any resident who wishes to be recognized as a "returning resident" must submit an application for a taxation decision through a representative. An answer regarding the decision will be received only after the application has been submitted to the International Taxation Department of the Tax Authority along with documents confirming the facts stated in the application. An application can also be submitted anonymously, which allows a written application without revealing the name and details of the applicant. This route is suitable for anyone who has been abroad, but there is doubt about the status of the applicant and even in cases where the application is made after returning to Israel.
Preparation for the end of the benefits period
the reform published on September 16, 2008 was enacted with the aim of encouraging the immigration and return to Israel of new immigrants and Israelis who are considering returning to Israel. The reform established an exemption from reporting tax in Israel for a period of ten years, which will apply to assets and avoidance originating outside of Israel. The benefits encompass all types of expansions produced or grown outside of Israel, including: salary, business, labor, trade, interest, dividend, rent, royalties, and also capital gains from the sale of
assets originating abroad.
The reform provides a special and worthwhile opportunity to immigrate to Israel, as well as a new route for hundreds of thousands of Israelis living abroad to return home. This program forms a central pillar in the efforts of the State of Israel to increase the number of people who choose the State of Israel as the center of their lives. As part of the reform, immigrants and returning residents will benefit from an acclimatization route and an exemption Taxes also on new assets and activities outside of Israel. Since that reform, many individuals immigrated or returned to Israel in the status of immigrants or long-term returning residents
A long-time returning resident is someone who returned to Israel after being a foreign resident for at least 10 years. The provisions of the law grant those individual beneficiaries benefits such as a 10-year exemption from tax and reporting on all assets and income outside of Israel (the "benefit period"). With the end of the period of benefits and exemptions, the current income from abroad, for example, will be subject to tax, and in relation to capital gain - the exemption will be given even after the end of the period of benefits based on a linear ratio. As part of our ongoing work, we come across many beneficiary individuals who will soon finish the benefit perioand therefore we recommend paying attention to the points/instructions provided in the article .