Since January 1, 2003, Israel has changed its method for
collecting tax from its residents by using a system called
"personal taxation". This means that all Israeli
residents have to report all their income and pay tax from any
asset or account regardless of its geographical source.
However, since 2008, in honor of Israel's 60th Independence
Day, the Israel Tax Authority (ITA) introduced a special tax regime
whereas "new immigrants" and "senior returning
residents" (Israelis who have lived outside of Israel for at
least 10 years) are entitled to a 10 year tax exemption on their
non-Israeli sourced income and capital gains. This tax exemption
applies not only to investment income but also to salary, business
income, and pensions from non-Israeli sources. There is also a 10
year exemption from filing Israeli tax returns if the only
income is from foreign assets. Once the 10 year tax holiday ends,
the Israeli resident will be liable to report and pay tax on his
foreign
