Transferring Large Sums From Israel to France

A widow in Marseille spent three months trying to move her late husband's Tel Aviv savings to her account in France. The Israeli succession order had been accepted, the bank recognised her as the heir, and roughly NIS 900,000, a little over EUR 220,000, sat ready to go. She sent the branch her French account details and assumed the transfer would follow. It did not. The bank held the money for weeks while it decided whether any part of the balance was taxable income, then asked for a chain of documents she had never heard of and could not read.

Getting money out of Israel is rarely blocked. It is slowed. An Israeli bank sits between two domestic regulators that both want paperwork before a large sum leaves the country, while a French resident on the receiving end answers to a tax system that watches closely and, on inheritances, sometimes taxes. None of these authorities talk to each other, and none will chase the documents on your behalf. The whole burden of assembling the right certificates falls on the person in France, usually at the moment they can least easily walk into an Israeli branch. This is how the process actually runs, and where French residents most often lose time and money.

The First Question the Bank Asks: Is This Income?

Every large outbound transfer from Israel gets sorted into one of two boxes, and everything downstream turns on which box the bank picks.

The first box is capital. Your own savings, a cleared inheritance, or the net proceeds of a property sale on which Israeli tax has already been paid. Capital leaving the country is not taxed again on the way out. The bank's concern here is not tax. It is proof that the money is what you say it is.

The second box is income. Rent from an Israeli apartment, dividends from an Israeli company, interest, or a capital gain that has not yet been taxed. When a bank pays Israeli-source income to someone living abroad, the law turns the bank itself into a collection point and makes it withhold before the money moves.

That distinction is where French residents most often get caught. They think of the whole balance as "my money," which it is, while the bank is legally obliged to check whether Israel has taken its share of any income component first.

In Practice: Under Section 170 of the Income Tax Ordinance 1961, an Israeli bank must withhold 25% at source from any payment of Israeli-source income to a foreign resident, alongside the general withholding duty in Section 164. To release accumulated rent of, say, NIS 90,000 to a French owner without that deduction, the owner files Form A/114 with the Israel Tax Authority, the Rashut HaMisim, and the assessing officer usually issues a reduced-rate or exemption certificate within 21 to 45 days of a complete filing. Skip that step and the 25% is gone until you reclaim it through an Israeli tax return.

Selling Israeli Property First? The Clearance Comes Before the Wire

If the sum you want to move is the proceeds of selling Israeli real estate, an extra gate sits in front of the bank entirely.

An Israeli bank will not wire sale proceeds abroad until the capital gains position is resolved, and the buyer's own lawyer will have insisted on the same clearance to register the transfer at the Land Registry. This is the ishur mas shevach, the betterment-tax certificate.

Under the Real Estate Taxation Law 1963, betterment tax, mas shevach, on the real gain runs up to 25% for an individual seller, and the certificate that frees the funds is issued only once that tax is paid or secured. For a non-resident, the linear apportionment rules and the loss of the Israeli residential exemption often push the Israeli tax higher than a local seller would face, so this is a planning point worth raising before you sign, not after.

In Practice: On a NIS 2.6 million apartment sale, about EUR 640,000, the seller files a self-assessment with the Real Estate Taxation Office, the Misrad Mas Shevach, within 30 days of signing under the Real Estate Taxation Law 1963. The ishur that releases the proceeds for transfer commonly takes 30 to 60 days from filing, and the bank will not process an outbound wire without it. A French seller who has already committed to a purchase in France on a fixed acte de vente date can find the two timelines badly out of step, because the Israeli certificate does not bend to a French notaire's calendar.

The Anti-Money-Laundering Layer

Even when no tax is due, a large transfer meets a second Israeli gate: source of funds.

Since the Prohibition on Money Laundering Law 2000, Israeli banks have carried a personal reporting duty on unusual or large movements of money. In practice, once a transfer crosses roughly USD 50,000, the compliance department decides whether it goes, not the branch teller. They ask for a documentary chain: the succession order or will execution order for an inheritance, the signed sale contract and tax clearance for property, or historic statements for old savings.

For someone in France this is the most frustrating stage, because the requests arrive by email in Hebrew, name Israeli document types the recipient has never encountered, and often come one at a time rather than as a single list. A resident who cannot quickly produce an apostilled probate order or a translated contract can watch a fully lawful transfer stall for months. The fix is to front-load: assemble the entire source-of-funds file before asking for the wire, not after the compliance officer starts asking.

Landing in France: Declared, and Sometimes Taxed

Here the French side diverges sharply from the English-speaking countries, and it is worth knowing before the money arrives.

Receiving your own capital creates no French tax by itself. What France does insist on is disclosure. A French tax resident must declare every foreign account on form 3916, filed with the annual income tax return, under Article 1649 A of the General Tax Code. The penalty for failing to declare an account is EUR 1,500 for each account for each year it was concealed, and non-declaration also stretches the window in which the tax authority can go back and audit. An Israeli account you keep open after repatriating is perfectly lawful, but it is not invisible: Israel and France exchange bank data automatically under the Common Reporting Standard, so the French authorities already know the account exists. Our guide to Israeli bank accounts and French tax reporting covers what that ongoing visibility means in practice.

Then there is what the money earns. Once the funds sit in France, any interest, dividends, or capital gains they generate are taxable, generally under the prélèvement forfaitaire unique, the flat tax of 30% that combines income tax and social levies. And if you carry cash rather than wire it, physically moving EUR 10,000 or more across the French border must be declared to French customs, the Douane, just as sums above NIS 50,000 must be declared on the Israeli side.

The Inheritance Tax France Adds

This is the trap that has no equivalent in Australia or the United States, and it catches French heirs repeatedly.

France levies droits de succession, inheritance tax, and it can reach an Israeli estate. Under Article 750 ter of the General Tax Code, where the heir has been a French tax resident for at least six of the ten years before the death, French inheritance tax applies to what they receive worldwide, including assets in Israel. In the direct line, between parents and children, the rate climbs progressively to 45% above a per-child allowance of EUR 100,000, and between unrelated people it reaches 60%. Because Israel imposes no estate or inheritance tax of its own, there is no foreign death duty to credit against the French bill, so the French charge lands in full.

The filing is not optional and the deadline is short. A déclaration de succession is generally due within twelve months of a death that occurred abroad, and the tax is payable with it. A French heir who treats an Israeli inheritance as a simple repatriation, wires the money over, and says nothing can find themselves facing the tax, late-filing penalties, and interest, all at once, long after the Israeli side was cleanly closed.

Common Mistake: Assuming that clearing the money out of Israel is the end of the story. A Paris heir who had lived in France for two decades received about NIS 1.4 million from a parent's Tel Aviv estate, moved it to her French account, and filed nothing, on the view that "it was just my inheritance." Under Article 750 ter she owed French droits de succession on the whole sum, and having kept the Israeli account open and undeclared, she also drew the EUR 1,500 form 3916 penalty. The capital had left Israel lawfully. The French obligations it triggered had simply been ignored, and the penalties and interest cost far more than timely advice would have.

Choosing How the Money Travels

Once the legal gates are open, the transfer method still costs real money, and the bank's default route is rarely the cheapest.

A direct SWIFT wire from an Israeli bank is simple but layered with charges: a fixed transfer fee, a foreign-exchange spread baked into the shekel-to-euro rate, and sometimes a correspondent-bank fee taken mid-route. On a large sum the exchange spread dwarfs the fixed fee. A spread of even 0.6% on NIS 2 million is around NIS 12,000, quietly lost inside a rate presented as a courtesy. Regulated foreign-exchange transfer houses licensed by Israel's Capital Markets Authority often quote a tighter spread than a branch, though they run their own source-of-funds checks and will not take every non-resident. For a one-off seven-figure move, get the bank's all-in shekel-to-euro rate in writing and compare it against one licensed alternative before committing.

Doing It All From Abroad

None of this requires flying to Israel, provided representation is set up properly at the start.

A notarised and apostilled power of attorney lets an Israeli lawyer or accountant file the withholding forms, obtain the tax clearance, answer the compliance department in Hebrew, and instruct the bank. Many Israeli banks now complete the final transfer mandate for an existing non-resident client by secure video identification, which removes the last reason to travel. The coordination point French clients underestimate is the calendar. Israel and France run only an hour or two apart for most of the year, which helps, but the Israeli working week ends on Friday afternoon and the French administrative machine slows on its own schedule, so a document requested late in one country routinely waits a full cycle before the other can act on it.

Practical Checklist

• Decide early whether the money is capital or income, because the two follow completely different clearance paths in Israel
• For property proceeds, file the mas shevach self-assessment within 30 days of signing and budget 30 to 60 days for the ishur before any wire can leave
• For rent, dividends, or interest, apply for a reduced-withholding or exemption certificate on Form A/114 before instructing the transfer
• Assemble the full source-of-funds file, the succession order, sale contract, and historic statements, with apostilles and Hebrew translations, before asking the bank to move the money
• On the French side, declare every Israeli account on form 3916 and check whether an inheritance triggers droits de succession under Article 750 ter before you assume nothing is owed
• File the French déclaration de succession within twelve months of the death, because the deadline runs whether or not the Israeli side is finished
• Sign a power of attorney so an Israeli lawyer can manage the tax and compliance steps without you flying in
• Get the bank's all-in shekel-to-euro rate in writing and compare it with a licensed transfer house before committing a large sum

Speak With an Israeli Attorney

Moving a large sum from Israel to France is less about the wire and more about clearing the Israeli tax and compliance gates in front of it, and doing so before a French notaire's completion date or a twelve-month inheritance deadline forces your hand. An Israeli attorney can obtain the tax clearance, assemble the source-of-funds file the bank will demand, and time the release so it does not collide with your French filing obligations.

Contact us for a confidential initial consultation.