I made aliyah in 2026. Do I now have to report my American assets to the Israel Tax Authority even though they are still tax exempt?

For eighteen years the most valuable part of the new immigrant package was not the tax exemption at all. It was the silence: a decade during which a foreign brokerage account, a rental property in Florida and a family LLC simply never appeared on any Israeli filing. That ended for anyone who became an Israeli resident on or after 1 January 2026. The money is still exempt. The disclosure is not optional any more.

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Detailed Answer

Amendment No. 272 to the Income Tax Ordinance, 5784-2024, was published on 7 April 2024, and its central move for immigrants is a deletion rather than an addition. Section 134B of the Ordinance carried the reporting exemption for a "new Israeli resident" and a "veteran returning resident", and it is gone. The operative cut-off is the date on which you became an Israeli resident: on or after 1 January 2026 you are inside the new regime, before that date you keep the old one for the balance of your ten years. What survives is the substantive relief. Section 14 still exempts foreign-source income from Israeli tax for ten years from the date of aliyah, and the capital gains relief on assets held before arrival is unchanged. The duty that has been switched back on is the ordinary one under Section 131, which requires the annual return to set out income and assets, and it now applies to exempt foreign income and foreign assets in the same way as to anything else. The driver was not domestic revenue policy but the transparency standards of the OECD Global Forum on Transparency and Exchange of Information for Tax Purposes, which had marked Israel's carve-out as a gap. That matters because it tells you the direction of travel: nobody should plan on the basis that the reporting obligation will be softened later.

For an American oleh the practical consequence is a second disclosure system running in parallel with the one you already have. A US citizen does not stop being a US taxpayer on landing at Ben Gurion, so the FBAR and the Form 8938 statement of specified foreign financial assets continue on their own schedule, measured against US thresholds and filed with US authorities. Israel now wants its own picture, filed with the Israel Tax Authority, in Hebrew, on Israeli forms, on the Israeli calendar. The first return covering the 2026 tax year falls due during 2027, which sounds comfortable until you try to assemble a decade of American account statements, cost bases in dollars and entity documents in the space of a few weeks. A worked example makes the shape of it clear: an oleh who arrives with a NIS 8,000,000 portfolio at a US broker pays no Israeli tax on its dividends or its gains for ten years, and still has to list the account and the income on the Israeli return every one of those years. Expect a first return with meaningful foreign holdings to cost somewhere in the NIS 5,000 to NIS 15,000 range in Israeli professional fees, materially more where a trust or a closely held foreign company is involved, and note that the same Amendment imposes a separate notification duty on trustees that runs on its own deadlines. Two practical points repay attention before the first filing. Currency and cost basis have to be converted and evidenced on Israeli terms, which is a different exercise from the one your American accountant performs. And a US structure that was invisible to Israel until now, such as a revocable living trust or an LLC holding rental property, has to be characterised for Israeli purposes, because the Israeli treatment of it may not match the American one. Our answer on the ten-year exemption for new immigrants sets out what remains exempt; read it alongside this one rather than instead of it, because the exemption and the disclosure duty now sit side by side.

In Practice: Amendment No. 272 to the Income Tax Ordinance, 5784-2024, published on 7 April 2024, deleted Section 134B and with it the reporting exemption for new immigrants and veteran returning residents who became Israeli residents on or after 1 January 2026. The Section 14 exemption from tax on foreign income for ten years is unaffected, but the Section 131 annual return to the Israel Tax Authority must now disclose exempt foreign income and foreign assets. A NIS 8,000,000 foreign portfolio remains untaxed in Israel and still has to be listed every year. The first return covering the 2026 tax year is filed during 2027, and a first filing with substantial foreign holdings typically runs NIS 5,000 to NIS 15,000 in Israeli professional fees.

When to Consult a Lawyer

• You hold assets through a trust, an LLC or a foreign company. Israeli characterisation of those structures does not follow the American one, and a mismatch declared badly in the first return is far harder to correct than to get right once.
• You are unsure of the exact date you became an Israeli resident. The 1 January 2026 line turns on residency rather than on the date stamped in your teudat oleh, and a person who arrived late in 2025 but whose centre of life moved in 2026 needs that question settled before filing anything.
• You have exempt foreign income you never intended anyone in Israel to see. The exemption is intact, but non-disclosure is now a filing default rather than a legitimate use of the old regime, and the correct response is a properly prepared first return rather than an omission.

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Speak With an Israeli Attorney

We fix your Israeli residency start date, characterise American trusts and entities for Israeli purposes before they reach a return, and build the first disclosure so that the Section 14 exemption is claimed cleanly rather than argued about later.

Contact us for a confidential initial consultation.