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New immigrants and Returning residents

most common questions:

  1. I have leftIsrael in Feb 2004 with my family. my center of life has changed since and I amplaning to return to Israel on Aug 2009. will I beconsidered an'old-timer returning resident'? yes, the count is as follows - y2004 isinthe count (since you were livingoutside ofIsraelfor more than 183 days), togther with 2005-8 you should reach the 5 year neccessary to get the status
  2. I have left Israel in Aug 2004 and plan to return on Sep 2009, will I be considered an 'old-timer returning resident? no, the year 2004 is not in the count, and you start counting from 2005 until 2008 so you don't have 5 full years!
  3. I intend to invest in Israel but not to make 'ALIA', will I be taxed on my business income outside of Israel ? no, in such case if your center of life is out of Israel, you will be taxed only on your income derived from Israel.
  4. I intend to return to Israel after living abroad for the last 15 years. My plan is tokeep my business abroad active, will I be taxed on such income? you will not be taxed on suchincome that is generated from outside of Israel for 10years (assuming that you areconsidered to be 'old-timer returning resident')
  5. we plan to return to Israel after 7 years abroad - is it possbile that tax authoritiy in Israel will tax us on income generated from the time we lived outside of Israel? assuming that during this period your center of life as a family was not in Israel, you will not be taxed onsuch income.In addition, you are eligibale to sometax benefitsas a returning reisdent.
  6. Is it true that Israeli taxation is very high for individuals and for business? it is true for individuals who will reach very high levelsof tax on income that is above the $3-4k per month. However, on Corporations the tax rate is 26% (should be reduced to 25%in 2010). In addition, tax rates for some corporates that are involved in the Hi-Tech business, and are located in some areas can get to 0% tax rate for about 10years or even more (if foreign investors involved).
  7. I am a returning resident to Israel (after living abroad for the last 12 years), during the time Iwas living aboradI have pruchased real estate. Should I sell it before my return? No need, tax authoritieswill not tax you on that income for 10 years from the day you return (relevant only for real estate that is located outside of Israel)