Returning Resident

Returning resident (Hebrew: תושב חוזר, toshav chozer) is an Israeli tax-law status for citizens who lived abroad and later re-establish Israeli residency, but the law actually recognizes two distinct tiers with very different benefits: an ordinary returning resident, who lived abroad for six to ten years, and a veteran returning resident (toshav chozer vatik), who lived abroad for ten years or more and receives the same full benefits package as a new immigrant.

What Benefits Does an Ordinary Returning Resident Get?

A citizen who cut off Israeli tax residency and lived abroad for at least six but fewer than ten years qualifies as an ordinary returning resident. This status brings more limited relief: a five-year exemption on certain passive foreign-source income, such as pensions, royalties, rental income, interest and dividends on assets the person acquired abroad after leaving Israel, plus a ten-year exemption specifically on capital gains from the sale of foreign assets purchased while living abroad. Unlike a veteran returning resident, an ordinary returning resident remains subject to standard reporting obligations to the Israel Tax Authority throughout.

What Benefits Does a Veteran Returning Resident Get?

A citizen who lived abroad for ten consecutive years or more qualifies as a veteran returning resident and receives the same package as a new oleh: a full ten-year exemption from Israeli tax on all foreign-source income and capital gains, not just passive categories, under Amendment 168 to the Income Tax Ordinance, enacted in 2008, which put new immigrants and veteran returning residents on equal footing. Veteran returning residents also access the five-year exemption on Israeli-source earned income created by the reform the Knesset passed on March 30, 2026, provided they become Israeli tax residents between November 5, 2025 and December 31, 2026.

What Changed on Reporting Requirements in 2026?

An April 2, 2024 amendment to the Income Tax Ordinance abolished the long-standing reporting exemption for new immigrants and veteran returning residents who become Israeli tax residents on or after January 1, 2026. From that date, even someone still benefiting from the full ten-year tax exemption must disclose worldwide income and foreign assets to the Israel Tax Authority via Form 150; anyone who became a resident before December 31, 2025 keeps the older, no-reporting version of the benefit for the remainder of their ten-year window.

How Does the Arrival Date Get Determined?

Neither Amendment 168 nor later legislation defines an exact "arrival date" for tax purposes. The Israel Tax Authority's Circular 1/2011 resolves this by treating the arrival date as the earlier of two events: the date the individual establishes a fixed abode in Israel, or the date the individual receives formal Returning Resident or New Resident status from the Ministry of Aliyah and Integration, a determination that matters because it starts the clock on every benefit period described above.

Read Next in The Olam

• Aliyah · Olim · Oleh Chadash — Adjacent status categories
• Aliyah Tax Reform 2026 — The 2026 Israeli-source income exemption
• Worldwide Disclosure Regime — The 2026 reporting layer
• Family Office Migration — Returning-resident structuring practice