Israel Personal Income Tax

Resident individuals are subject to tax on their worldwide income and worldwide capital gains. Nonresident individuals are subject to tax on income from Israeli sources, which is income accrued or derived in Israel.

An Israeli resident is defined as an individual whose center of living is in Israel, taking into account the person’s family, eco­nomic and social links, including the following considerations:

  • Permanent home
  • Place of residence of the individual and his or her family
  • Habitual place of business or permanent place of employment
  • Place where assets and investments are located
  • Place of membership in organizations, associations and institutions

Under the law, a rebuttable presumption of Israeli residency will apply in either of the following circumstances:

  • The individual is present in Israel at least 183 days in a tax year ending 31 December.
  • The individual is present in Israel at least 30 days in the current tax year and a cumulative total of 425 days in the current and two preceding tax years.

If an individual is relocating for more than four years, he or she may sever residency under a foreign resident definition. This definition states that if during the first two years the individual is not present in Israel for more than 183 days and if the individual does not have a center of vital interest during the next two consecutive years, the individual is considered a nonresident dur­ing these four years (from date of departure).

New Immigrants (Oleh Hadash), First Time Residents or Senior Returning Residents (who were considered nonresident for a period of at least 10 consecutive years according to domestic law) are generally classified as residents for Israeli tax purposes since the earlier of the date of repatriation of the individual or the fam­ily, a stay over 183 days or the date of classification as a New Immigrant by the Israeli authorities. They may enjoy significant income tax, capital gains tax and import tax exemptions or ben­efits for a 10-year period (that is, tax exemption on foreign-source income and exemption from reporting under certain cir­cumstances). New Immigrants and Senior Returning Residents may be considered nonresident for tax purposes during the first 12 months of their stay in Israel if a special notice form is submit­ted to the Israeli tax authority within 90 days after arrival. It is possible to approach the Israeli tax authority and obtain a certifi­cate of New Immigrant or Senior Returning Resident through the filing an official application. Such certificate may provide the taxpayer with some assurance regarding his or her tax status and whether he or she is eligible for the associated tax benefits.

A distinctive regime is available for returning residents who spent more than six years outside Israel. The regime includes tax benefits for these individuals on their return to Israel.

Income subject to tax

Employment income. Taxable employment income broadly covers salary and virtually all cash and in-kind benefits and allowances provided directly or indirectly to employees or for their benefit. If benefits are provided on a net-of-tax basis, they must be grossed up for tax purposes.

Company vehicles at an employee’s disposal are taxable to the employee based on their prescribed usage value. The usage value for vehicles registered on or before 31 December 2009 depends on the price group of the model shown on the vehicle registration. The usage value for vehicles registered on or after 1 January 2010 equals a certain percentage of the vehicle’s cost as defined in detailed regulations. These values are set forth in tax tables pub­lished by the tax authorities.

The use of a cell phone provided by the employer is taxable (attrib­uted income of a specific amount, which is ILS105 per month during 2016).

Educational allowances provided by employers to their employ­ees are taxable for income tax and national insurance purposes.

A portion of severance payments granted by employers to employ­ees on termination of employment relationships is exempt from tax, regardless of whether the payments are required by law or are voluntary. The exempt portion is the lesser of one month’s salary or ILS12,230 (as of 2016) per year of service.

Some Israeli employers provide a range of social benefits through externally approved provident funds. These funds are adminis­tered by Israeli insurance companies, private brokers or the “Histadrut” labor movement. The social benefits for employees typically include some or all of the benefits shown in the follow­ing tables.

Contribution as a
percentage of salary
Employee                    Employer              
Benefit % %
Retirement policy

Comprehensive pension plan

5.5 (a) 6 (a)
Long-term savings plan 5.5 (a) 6 (a)
Severance pay funding 0 8.33
Disability insurance 0 0 to 2.5
Educational funds (b) 2.5 (c) 7.5 (c)
  • a) These are the maximum rates. The first 5% of the employer’s contributions is matched by a parallel contribution by the employee. The balance of the contri­bution up to the maximum rate is voluntary. Employers’ contributions are ex­empt from tax if contributions are made on monthly salary not exceeding ILS23,660. Contributions exceed ing this amount are taxable as employment income.
  • b) These funds may be used after three years for training in Israel or, after six years, for any reason. Different rules apply to 5% or greater shareholders and to self-employed individuals.
  • c) These are the maximum rates. Employers’ contributions are exempt from tax if contributions are made on monthly salary not exceeding ILS18,270. Con­tributions exceeding this amount are taxable as employment income.

As a result of major amendments to the law, the calculations of the above tax credits and deductions have become very complicated. Readers should seek professional advice before making decisions.

Self-employment income. Residents and nonresidents generally are subject to Israeli income tax on income derived from a business conducted in Israel and on income from one-time commercial transactions. Residents are also subject to tax on overseas income.

Self-employed individuals are subject to tax on business profits at the rates set forth in Rates.

Directors’ fees. Directors’ fees and related expenses for participat­ing in board meetings are taxable as income from self-employment. A 17% value-added tax (VAT) liability also arises, but if the direc­tor derives primarily employment income, the payer company may account for the VAT under a reverse-charge mechanism. The company may recover the VAT as input VAT if it is a VAT dealer. Direc tors’ remuneration for other managerial duties is taxable as em ployment income.

For private, closely held companies (controlled by five or fewer indi viduals or their relatives), additional rules apply to the de duct ibility of payments to employee-shareholders who directly or indirectly control 10% or more of such companies.

Investment income. The following tax rates apply to investment income and gains derived by individuals.

Income Rate (%)
Real (inflation adjusted) capital gains derived from publicly traded and untraded securities
General rate for individuals on
gains accruing from 1 January 2012
25
Individuals who were 10%-or-greater shareholders (material shareholders) in the company concerned at any time within
the 12 preceding months
30
General rate for individuals on linear portion of gains accruing during the period of 1 January
2003 through 31 December 2011
20
Gains accruing to material shareholders during the period of 1 January 2003 through
31 December 2011
25
Gains accruing before 1 January 2003; old rates that apply to the time-based linear
portion of the gains
Up to 50
Capital gains from securities that are not
linked to the consumer price index or
foreign currency, such as bonds, short-term
government bonds and commercial paper:
General rate 15
Material shareholders 20
Interest:
On “linked” (that is, linked to the consumer
price index in Israel) or foreign instruments
25
On “unlinked” Israeli instruments 15
Material shareholders Up to 50
Dividends:
General rate for individuals 25
Material shareholders 30
Paid from the profits of an approved or privileged enterprise or approved property under the Law for the Encouragement of Capital
Investments, 1959
0 / 4 / 15
Others
Real Estate Investment Trust (REIT) if conditions met up to 50
Residential rental income derived
by an individual landlord from
individual tenants, not exceeding
ILS5,080 per month (any excess
reduces the exemption by the amount
of the excess)
Exempt up to ceiling

Double tax relief provisions may apply in certain cases (see Section E).

Taxation of employee share option plans and share purchase plans. Detailed rules apply to employee share option plans and share purchase plans. Capital gains tax treatment is allowed for certain qualified plans called Section 102 plans, which are administered by a trustee, if, for options granted on or after 1 January 2006, at least two years have elapsed since the options were granted. Options granted according to the capital gains alternative (see below) before 1 January 2006 are subject to a minimum holding period of 24 months as of the end of the year in which the options were granted or 30 months from the grant date, depending on the election of the employee. Gains derived from non-qualified plans

are treated as an ordinary income subject to income tax (up to 50%) and social security tax (12% tax up to a certain cap).

The tax authorities must approve the trustee and receive notice concerning a Section 102 plan at least 30 days before the imple­mentation of the plan. Individuals who move to another country to work or reside may request tax rulings from the tax authorities to mitigate uncertainty or address double taxation or tax withholding.

Employers may choose between alternative rules for dividing gains between salary income (the employer deducts an option expense and the employee is subject to income tax at rates of up to 50% plus social security; see Section C) and capital gains (the employer receives no deduction and the employee is subject to capital gains tax at a rate of 25%).

Restricted Stock Units (RSU) plans may be qualified in the same manner as Section 102 plans by filing an application for tax rul­ing with the Israeli tax authority and depositing the stock units in the hands of a qualified trustee for a period of at least two years.

Capital gains and losses. Residents and nonresidents are generally subject to Israeli tax on their capital gains relating directly or indirectly to assets in Israel, including Israeli securities, and to rights related to such assets. However, under a relevant tax treaty, a resident of the other tax treaty country may be exempt from Israeli tax on capital gains, except for gains derived from trans­fers of real estate interests or business assets in Israel and trans­fers by material shareholders. Special rules apply to publicly traded securities (see below). Resident individuals are also subject to capital gains tax on their capital gains derived abroad.

Exit tax. Persons who cease to be Israeli residents are generally liable for capital gains tax as if they sold all their assets one day before they ceased to be residents. The tax is payable on depar­ture or on sale of the assets concerned (including shares and options) based on the linear portion of the gain related to the portion of the holding period during which the person was con­sidered an Israeli resident.

Calculation of taxable amount. Capital gains are divided into real and inflationary components. In general, real gains derived before 31 December 2002 are taxed at the regular personal tax rates (30% to 50%). However, real gains derived from foreign publicly traded securities before 31 December 2004 are generally taxed at a rate of 35%. Any capital gains derived after these dates are taxed at a rate of 25% (or 30% if a 10%-or-greater shareholder [material shareholder]). The inflationary component is exempt from tax to the extent it accrued after 31 December 1993, and is taxable at the rate of 10% to the extent it accrued before that date.

Capital losses may be used to offset capital gains derived in the same tax year or in subsequent tax years. In some cases, they may be offset against interest or dividends from securities.

Detailed rules relate to deferrals of capital gains tax in certain cases, including mergers, divisions and shares-for-assets exchanges.

Gains attributable to securities. Israeli residents are taxed at a rate of 25% on the real (inflation adjusted) gains derived from sales of traded securities in Israel and abroad, or 15% on the nominal gain on the sale of certain bonds not linked to the consumer price index or a foreign currency (see above). Regular tax rates up to 50% apply if any of the following conditions are satisfied:

  • Interest expense is deducted.
  • The interest income is business income.
  • A special relationship exists (for example, customer-supplier, employer-employee or related parties).

Gains derived from sales of bonds issued by a foreign country or foreign mutual funds are subject to tax at the rate of 25% (or 30% if a material shareholder). Nonresidents are exempt from Israeli tax on capital gains derived on the Tel-Aviv stock exchange or on Israeli securities on an overseas exchange. However, if an Israeli resident owns at least 25% of a nonresident investor company, such exemption does not apply.

Gains attributable to real estate. Gains derived from sales of Israeli real estate or from sales of interests in real estate entities (entities whose primary assets relate to Israeli real estate) are subject to land appreciation tax at the regular rates of up to 48% for the portion of the gain that relates to the period before 7 November 2001. For the linear portion that relates to the period after that date, the applicable rate is 25% from 2007, with the exception of material shareholders who are taxed at a rate of 30%. Assets acquired in 2002 are eligible for a tax rebate of 20%. Assets acquired in 2003 are eligible for a 10% rebate. Various exemptions apply to residential homes. A sales tax of 2.5% on certain real estate sales was repealed, effective from 1 August 2007. Also, see Real estate tax in Section B.

In addition, the purchaser of real estate must pay transfer fees (acquisition tax) at various rates ranging from 0% to 10%. For an interest acquired in a real estate entity, acquisition tax is imposed on the underlying real estate asset value without offsetting liabil­ities or borrowings.

Deductions

Deductible expenses. Business-related expenses incurred by em­ployees are deductible only in limited circumstances. For example, expenses incurred to update existing professional know ledge are deductible. However, to claim these deductions, employees gen­erally must file annual personal Israeli tax returns, even if they are otherwise exempt from filing.

To complement the tax deductions available to employees for education, only self-employed individuals may deduct payments made to approved education funds that are used for training or education in Israel (or for any purpose after six years). The amount of payments that may be deducted is subject to the fol­lowing limitations.

Percent of income,                             Deduction

up to limit*                                              available

First 2.5                                                         None

Next 4.5                                                  Full amount

Over 7.0                                                        None

* The annual income limit for 2016 is ILS261,000. This limit is adjusted annually

Personal deductions. In general, tax relief for individuals is in the form of tax credits rather than tax deductions. Consequently, relatively few items are deductible for tax purposes.

As a result of major amendments to the law, the calculation of personal deductions has become complicated. Readers should seek professional advice before making decisions.

Business deductions. Expenses are generally deductible if they are incurred wholly and exclusively in the production of taxable income. Additional rules apply to certain items, including car ex penses, travel, entertainment, and research and development. The cash basis is acceptable for certain small businesses, and spe­cial inflation-adjustment rules are prescribed for businesses. These adjustments include inflation relief relating to inventories and depreciation for certain small businesses.

Special rules for expatriates. If no treaty exemption applies, expa­triate nonresidents working in Israel lawfully for an employer may enjoy certain benefits. For the first 12 months in Israel, a “foreign expert” is entitled to a deduction for accommodation expenses incurred and a living expense deduction of up to ILS320 per day if the employment income exceeds ILS13,200 per month. To be considered a “foreign expert” (B1 visa holder) under the Israeli income tax regulations, the assignee needs to meet the following criteria:

  • He or she is legally allowed to work in Israel.
  • He or she is working in his or her field of expertise and was invited to work in Israel by a local entity.
  • He or she earns a gross salary exceeding ILS13,200 per month.

A maximum tax rate of 25% for up to three years (extendible for up to five more years) applies to an expatriate if a resident-approved entity invites the expatriate to work in Israel and applies to the Ministry of Industry, Trade and Labor for an Approved Specialist status for the expatriate before his or her arrival in Israel. This status is granted on a limited discretionary basis pri­marily to industrial or tourism specialists. If granted, the reduced tax rate applies to only USD75,000 of annual salary.

Foreign journalists who are members of the Foreign Press Association in Israel and foreign athletes are entitled to a tax rate of 25% and the above-mentioned expatriate deductions for the first 36 months of work in Israel for foreign journalists and the first 48 months of work for foreign athletes.

A levy at the rate of 20% (or 10% or 15%, depending on the employee’s field of employment) is imposed on foreign employ­ees’ employment income unless the employees are journalists or athletes or unless the employment income exceeds ILS18,668 per month. The levy must be paid by the employer and is not deduct­ed from the employment income.

Rates. The Israeli tax year is the calendar year. In principle, Israeli personal tax liability is computed annually. However, tax is typi­cally withheld from salaries and reported each month. Monthly tax brackets used during a year for payroll and other purposes are updated annually for inflation and are totaled to produce the annual tax brackets. The following table presents the annual tax­able income brackets for 2016.

 

Taxable income Tax rate* Tax due Cumulative tax due
ILS % ILS ILS
First 62,640 10 6,264 6,264
Next 44,400 14 6,216 12,480
Next 59,280 21 12,449 24,929
Next 71,280 31 22,097 47,026
Next 259,320 34 88,168 135,194
Next 306,600 48 147,168 282,362
Above 803,520 50

* These tax rates are restricted to income earned from employment and self-employment and to rental income derived by persons over 60 years of age. In other cases, a minimum tax rate of 31% applies to the first ILS237,600, a tax rate of 34% applies to income between ILS237,601 and ILS496,920, a tax rate of 48% applies to income between ILS496,920 and ILS803,520, and a tax rate of 50% applies to income above ILS803,520.

Credits. Israeli resident individuals are entitled to personal tax credits, which are known as credit points. These credit points are deducted from the computed income tax liability of individuals. Each credit point is currently worth ILS216 per month.

The number of credit points granted to an individual reflects fam­ily circumstances. For example, an unmarried male resident gen­erally receives 2.25 credit points, and an unmarried female resi­dent generally receives 2.75 credit points. If, for example, both spouses work and opt for separate tax computations, the male receives 2.25 credit points and the female/spouse receives 2.75 points; the female/spouse also generally receives one credit point for each child under 18 years of age and one-half of a credit point for a child born or reaching 18 in the tax year. Effective from 2012, the husband is also eligible for certain credit points for infants up to the age of three years.

The following are other significant tax credits granted to individuals:

  • Credits with respect to savings fund contributions (see Income subject to tax).
  • Tax credit for 35% of charitable contributions to recognized in stitutions if a taxpayer’s annual contributions exceed ILS180. How ever, no credit is given for annual contributions exceed­ing 30% of taxable income or ILS9,212,000, whichever is lower.
  • Additional credits in various other cases, including new immi­grants, returning residents, one-parent families, divorcées, gradu­ates of a higher education institute and residents living and work­ing in various priority areas.

Relief for losses. In general, business losses may be offset against income from any source derived in the same tax year, including salary income. Unrelieved business losses may be carried forward for an unlimited number of years to offset business income or capital gains derived from business activities (see Capital gains and losses).

Other taxes

Net worth tax. Net worth tax is not levied in Israel.

Estate and gift taxes. Israel does not impose taxes on inheri­tances or bona fide gifts. For transfers by inheritance or by gift of assets that would normally be subject to capital gains tax or land appreciation tax, the recipient’s tax cost base and date of pur­chase are generally deemed to be the same as those for the trans­feror of the property.

Real estate tax. In general, sellers of real estate assets are subject to land appreciation tax on capital gains at rates of up to 50% on any appreciation, based on the linear portion, before 7 November 2001, at a rate of 20% on any appreciation after that date until 31 December 2011, and at a rate of 25% after that date, with cer­tain exceptions, including exemption provisions for homes owned by an individual.

Purchasers of real estate interests in Israel pay an acquisition tax at rates ranging from 0% to 7%.

Social security

Contributions. National insurance contributions are generally pay­able on taxable income as calculated for income tax purposes. The table below sets out the rates of national insurance contribu­tions. For residents, these rates include a supplementary health levy. Foreign residents generally arrange comprehensive private health care.

Contribution as percentage of income

Non-working

Category

Israeli residents (b) Monthly income up to ILS5,678 Monthly income from ILS5,678 to ILS43,240 Nonresidents Monthly income up to ILS5,678 Monthly income from ILS5,678 to ILS43,240 Nonresidents from a social security treaty country Monthly income up to ILS5,678 Monthly income from ILS5,678 to ILS43,240

  • Fifty-two percent of social security contributions paid during a tax year on unemployment income is deductible for income tax purposes during the year of payment.
  • Lower contributions may apply to Israeli residents who work abroad as self-employed persons for continuous periods exceeding six months or for non­resident employers, unless they were hired in Israel.
  • An organization levy at rates of 0.7% to 0.95% is also payable by Israeli resi­dents who are members of certain labor unions or who work in a unionized workplace.

Totalization agreements. Israel has entered into social security totalization agreements with the following jurisdictions.

Austria                              France                        Romania

Belgium                            Germany                    Slovak Republic

Bulgaria                            Italy                            Sweden

Canada                              Netherlands                Switzerland

Czech Republic                 Norway                      United Kingdom

Denmark                           Poland                        Uruguay

Finland

Tax filing and payment procedures

In principle, Israeli and foreign employers with personnel in Israel must maintain an Israeli payroll withholding tax file. Income tax and national insurance contributions relating to monthly em­ploy ment income and benefits must generally be reported and remitted by the 15th day of each following month. Various other monthly or bimonthly filings may also be required from the em­ployer, including company tax advances determined by the tax authorities and supplementary company tax advances of 45% for nondeductible expenses incurred, including car maintenance and depreciation, travel and entertainment.

Capital transactions. Capital gains transactions generally are re portable within 30 days after the transaction date. Land appre­ciation tax transactions are generally reportable within 30 to 50 days. Tax must be settled or paid on account within this period.

Annual tax returns. A general obligation to file an annual tax return exists. Nevertheless, as a result of the withholding tax sys­tem, individuals may be exempt from filing annual personal tax returns in Israel. Individ uals who are currently required to file annual tax returns include the following:

  • Foreign residents who accrue or derive income in Israel. How­ever, an exemption from filing may apply if tax is withheld at source and if the income is derived either from a business or profession conducted for no longer than 183 days in the tax year or from salary, dividends, interest or royalties.
  • Resident individuals over 18 years of age at the beginning of the tax year. However, for the 2016 tax year, an exemption from filing may apply if all of the following conditions are satisfied: — The salary does not exceed the annual ceiling of ILS643,000 per individual.

— Interest in Israel does not exceed the annual ceiling of ILS638,000.

— The amount of each type of other income (rent and foreign income) earned by the individual is less than ILS334,000 for each type of income.

The above amounts for the 2016 tax year will not be available until January 2017 when the December 2016 consumer price index is published.

Notwithstanding the above, the following individuals must file annual income tax returns:

  • Ten percent or greater shareholders
  • Spouses who work together
  • Individuals (or their spouses) who receive severance pay or a commuted pension allowed to be spread over several tax years
  • Trust settlors for the year in which they settle the trust
  • Recipients of a distribution or other transfer of assets from a trust
  • Professional athletes and their spouses
  • Individuals (or their spouses or children) who had either a law­ful right in a non-publicly traded foreign company or other

foreign assets worth more than ILS1,856,000 at any time during the tax year or a foreign bank account with a balance exceeding ILS1,856,000 at any time during the tax year

  • Individuals required to file returns for the previous year, unless a specific exemption is granted
  • Individuals who claim that they are not Israeli resident but did not meet the presumption of number of days (that is, stayed in Israel for a period longer than 183 days)
  • Any other person or entity instructed to file a return by a tax assessor

Individuals must also file half-year returns for capital gains if the full amount of the tax was not withheld at source. The returns are due on 31 January and 31 July.

Online filing. Online filing is required for those who have to file a tax return. Failure to file an online tax return by the due date results in a penalty of ILS500 for each full month of delay.

Residency detachment. As of the 2016 tax year, Israeli individu­als who do not meet the numerical presumptions mentioned in Who is liable, but claim that their center of living was outside Israel and that they are not Israeli residents, need to file a state­ment that they detached their Israeli residency with documents proving their claim. In addition, they are required to file an annual tax return.

Due dates for tax returns. For those who do not have to file an online tax return, the due date is 30 April following the year-end. Taxpayers who are required to file an online tax return must file it by 31 May following the year-end. The tax authorities may grant filing extensions. Individuals represented by an Israeli certified public accountant (CPA) may receive an automatic extension based on the number of tax returns that the CPA must file with the tax authorities.

Assessment. The Israeli tax system is based on the principle of self-assessment. An annual tax return must be accompanied by payment of any balance of tax due computed by the taxpayer for the relevant tax year.

Married persons. Married persons, or the tax assessor, may elect one spouse to be the registered spouse in whose name the couple is assessed. For the election to be binding, the registered spouse’s income should be at least 25% of the other spouse’s income in the year before the election and in the next five years. If the couple does not elect otherwise, the tax assessor nominates the spouse with the higher taxable income over the two years preceding the assessment as the registered taxpayer. Joint tax computations are allowed. How ever, if the spouses derive employment or self-employment income from unrelated sources, many couples may

benefit by opting to compute tax separately on the second spouse’s income.

Double tax relief and tax treaties

Unilateral relief. If no double tax treaty applies, Israeli residents may claim relief from double taxation (foreign tax credit) on foreign-source income.

Under Israeli domestic law or applicable tax treaties, foreign cap­ital gains tax on dispositions of foreign assets may be credited by Israeli residents against Israeli capital gains tax on such dispo si­tions. Any excess foreign tax credit may be carried forward for up to five tax years.

Foreign residents who receive little or no relief for Israeli taxes in their home countries may be granted a reduced Israeli tax rate by the Minister of Finance. In practice, the reduced rate is usually at least 25% and applies to capital gains only.

Tax treaties. Israel has entered into double tax treaties with the following jurisdictions.

Austria                            India                             Romania

Belarus                            Ireland                          Russian

Belgium                           Italy                              Federation

Brazil                               Jamaica                        Singapore

Bulgaria                           Japan                            Slovak Republic

Canada                            Korea (South)              Slovenia

China                               Latvia                           South Africa

Croatia                             Lithuania                      Spain

Czech Republic               Luxembourg                Sweden

Denmark                         Malta                            Switzerland

Estonia                            Mexico                         Taiwan

Ethiopia                           Moldova                      Thailand

Finland                            Netherlands                  Turkey

France                             Norway                        Ukraine

Georgia                           Panama                        United Kingdom

Germany                         Philippines                   United States

Greece                             Poland                          Uzbekistan

Hungary                          Portugal                       Vietnam

Israel is negotiating tax treaties with several jurisdictions.

  • Visit visas for tourist or business purposes

All foreign nationals, except those from countries that do not require entry visas from Israeli citizens, must obtain valid entry visas to enter Israel. Citizens of certain countries may obtain visas at the port of entry. Foreign nationals may enter Israel under visit visas, temporary residence visas or permanent residence visas.

Visit visas are divided into the following categories:

  • B1: For foreign nationals who wish to work and receive remun­eration in Israel on a temporary basis.
  • B2: For foreign nationals who wish to visit Israel for any pur­pose other than paid or unpaid work. This is the typical tourist visa or business visa.
  • B3: For foreign nationals whose entry status is not clear. This visa is of limited duration (one month) until the entry status is clarified and the entry visa is reclassified. The duty of reclassifying the entry status rests on the foreign national granted the B3 visit visa.
  • B4: For foreign nationals who wish to volunteer (work without earnings) in Israel.

Israel has visa exemption agreements with many jurisdictions. Tourist visa exemption applies to national and official passports only, and not to other travel documents. Citizens of the following jurisdictions are exempt from obtaining transit and class B2 visit visas.

Albania                          Grenada                      Palau

Andorra                         Guatemala                  Panama

Argentina                       Haiti                           Paraguay

Australia                        Honduras                   Peru

Austria                           Hong Kong                Philippines

Bahamas                        SAR                           Poland

Barbados                       Hungary                     Portugal

Belarus                          Iceland                        Romania

Belgium                         Ireland                        Russian

Belize                             Italy                            Federation (b)

Brazil                             Jamaica                       St. Kitts and Nevis

Bulgaria                         Japan                          St. Lucia

Canada                           Jersey                         St. Vincent and

Central African              Korea (South)             the Grenadines

Republic                        Latvia                         San Marino

Chile                              Lesotho                      Serbia

Colombia                       Liechtenstein              Singapore

Cook Islands                 Lithuania                    Slovak Republic

Costa Rica                     Luxembourg               Slovenia

Croatia                           Macau SAR               South Africa

Cyprus                           Macedonia                  Spain

Czech Republic              Malawi                       Suriname

Denmark                        Malta                          Swaziland

Dominica                       Mauritius                    Sweden

Dominican                     Mexico                       Switzerland

Republic                        Micronesia                 Taiwan

Ecuador                         Moldova (a)               Tonga

El Salvador                    Monaco                      Trinidad and

Estonia                           Mongolia                    Tobago

Fiji                                 Montenegro                Ukraine

Finland                          Nauru                         United Kingdom

France                            Netherlands                United States

Georgia                          New Zealand              Uruguay

Germany                        Niue                           Vanuatu

Greece                           Norway

  • The exemption applies only to citizens of Moldova who hold biometric passports.
  • The exemption applies only with the approval of the immigration authorities in Jerusalem.

In general, all visit visas, with the exception of B1 and B3 type visas, are valid between 30 and 90 days and may be renewed up to 180 days.

The application takes place at an Israeli consulate or at the local Ministry of Interior.

Each jurisdiction has a unique filing procedure for obtaining a visit visa.

Transit and visit visas may be applied for in groups.

Both B1 and B4 class visas may be applied for by the employer. A B1 visa may be renewed annually for up to 63 months.

Work permits

A foreign national may work in Israel only if he or she enters the country with a permanent residence visa or a temporary resi­dence visa or holds a B1, B4 or A1 visa.

An applicant and his or her employer can apply for a work permit valid for two years, one year or three months. An applicant and his or her employer must file certain items to obtain a work per­mit and a B-1 work visa. The B-1 work visa is always issued for a maximum period of one year and may be renewed annually, assuming that the employer and employee comply with the terms of the work permit.

The following are examples of the items that must be filed (other forms or submissions may be required):

  • Recommendation of the Ministry of Interior
  • Employee’s certificate of valid medical insurance
  • Salary letter with verification of the required expert’s salary (twice the average salary in the Israeli market, approximately USD4,800; amount is subject to change and needs to be checked)
  • An employer’s undertaking that assures the employee’s depar­ture on termination of the employment contract
  • The employee’s accurate personal data, including his or her passport number, curriculum vitae (CV) and diploma (police clearance and medical checks might be requested by the Israeli embassy or consulate during the consular procedure)
  • Letter of an Israeli employer or other Israeli party, explaining the reasons why the employee’s presence is needed
  • Affidavit on a specified form concerning the above items

The following can apply for a B1 visa:

  • An Israeli-based employer
  • A foreign employer that has business ties or has entered into a service agreement with an Israeli-based entity.

Detailed rules apply to employers and employees regarding, among other matters, pre-arrival medical examinations, as well as housing and medical care. As of January 2015, the amount of gov­ernment registration fees for a work permit and B1 work visa application (per principal applicant) is approximately USD2,925.

In December 2015, the immigration authorities issued new regu­lations for foreign experts in Israel. The following are significant aspects of the regulations:

  • The regulations distinguish between experts whose work activities require academic certification and experts whose work activities do not require academic certification.
  • New requirements have been set for experts whose work activi­ties do not require academic certification, such as payment of the expert’s salary to a bank account in Israel and providing proof of salary payments.
  • Foreign experts are now required to provide to some of the Israeli embassies and consulates abroad additional documents (police record and medical examinations) as part of the con­sular process. Foreign experts should check these requirements.

In addition, an experimental alternative option exists for employ­ees who arrive to Israel for a work purpose for a time period not exceeding 45 days. Under this option, the foreign expert can stay and work in Israel for up to 45 days in a year, continuously or intermittently. The counting of the days starts with the first day of arrival to Israel. The procedure is only available for citizens from visa-exempt jurisdictions (see Section F). It applies only to foreign experts who are needed in Israel to perform a temporary expertise assignment, such as advising, supervising, repairing equipment, training or making presentations.

Residence visas

Temporary residence visas are divided into the following categories:

  • A1: For Jewish foreign nationals only who wish to obtain Israeli citizenship and are eligible under the Law of Return. The A1 class visa is valid for one year and may be renewed twice, for a total of five years.
  • A2: For foreign nationals who wish to study in Israel.
  • A3: For members of the clergy who are invited to Israel by a religious institute. The institute must apply for the visa.
  • A4: For the spouse or children (under 18 years of age) of an A2 or A3 class visa holder.
  • A5: For foreign nationals wishing to stay in Israel for any rea­son other than those listed above.

Unless the individual is staying in Israel for the reasons mentioned in categories A1 to A4 above, a permanent residence visa is granted for an unlimited duration of stay. Applications are consid­ered by the Ministry of the Interior on a case-by-case basis. An application may be filed after several years of temporary residence.

Family and personal considerations

Family members. In certain circumstances, a B2 visa may be granted to the spouse and dependent children of a foreign nation­al who receives a B1 visa. In these cases, the duration of the B2 visa corresponds to that of the B1 visa.

Common law partners. No official regulation specifies the requirements for spouse status. Each case needs to be examined separately. However, proof of the sincerity of the relationship must be supported by documents, such as an affidavit from an attorney declaring that the couple is living together and joint bank account documents.

Driver’s permits. Foreign visitors who hold valid foreign or inter­national driver’s licenses may drive a car legally in Israel for up to 12 months per visit to Israel. If a visit exceeds 12 months, the visitor must pass a short vehicle control test and receive an Israeli driver’s license. Different rules apply to commercial vehicles.