Encouragement of Aliyah Law
Maximizing Tax Benefits for New Immigrants and Returning Residents
The 2026 Encouragement of Aliyah Law – Maximizing Tax Benefits for New Immigrants and Returning Residents
The year 2026 presents a significant opportunity for new immigrants and returning residents planning to establish their lives in Israel. Under the temporary provisions of the Encouragement of Aliyah Law, qualifying individuals may be eligible for unique tax benefits that, for the first time, may also apply to certain Israeli-source income, in addition to foreign-source income. Eligibility for these benefits, however, depends on meeting specific statutory requirements. Proper planning before immigrating or returning to Israel can have a substantial impact on the scope of the benefits available to you.
What Benefits Are Available Under the Temporary Provisions?
The temporary legislation provides several significant tax incentives, together with important conditions and limitations.
- Tax Exemption on Personal Income Earned in Israel
In qualifying cases, individuals may be eligible for an exemption from Israeli tax on employment or business income earned in Israel, up to a substantial statutory ceiling that may reach hundreds of thousands of shekels per year, subject to the applicable legal requirements and eligibility period. - Maintaining Tax Residency Status
The amount of time you spend in Israel after immigrating may directly affect your continued eligibility for these tax benefits. Failure to comply with the statutory residency requirements may result in the loss of tax benefits and could expose you to retroactive tax assessments. - Restrictions on Employment in a Family Business
Where income is derived from a business or company controlled by a family member, limitations may apply to the available tax exemption. It is therefore essential to review the ownership and operational structure in advance. - Strategic Planning for Foreign Income
Individuals who own foreign companies—including U.S. LLCs—should carefully review the classification of their income and the resulting Israeli tax implications in order to maximize available benefits while minimizing unnecessary tax exposure.
Why Is Professional Advice Important Before You Relocate?
The temporary provisions apply only to individuals who immigrate or return to Israel during the statutory eligibility period and are available for a limited time. In addition, eligibility depends on complex legal and tax concepts, including the nature of the income, tax residency status, the identity of the employer, and the structure of the business activity.
As Part of Our Legal Services, We Assist You With:
- Eligibility Assessment
We evaluate your personal circumstances before your move to Israel and assess the full range of tax benefits for which you may qualify. - Strategic Tax Planning
We design a tax-efficient structure that enables you to maximize the benefits available under the temporary legislation while remaining fully compliant with Israeli law. - Representation Before the Tax Authorities
We assist with all required filings, tax residency planning, and ongoing professional representation throughout your eligibility period.
