US-Israel Tax Treaty

The US-Israel Tax Treaty (formally the "Convention Between the Government of the United States of America and the Government of the State of Israel With Respect to Taxes on Income") is the bilateral tax treaty governing the allocation of taxing rights between the United States and Israel.

Signed in 1975 and ratified through subsequent domestic legislation in both jurisdictions, the treaty has been periodically amended through protocol arrangements. Specific current treaty provisions should be referenced from current Israel Tax Authority and US IRS publications.

The treaty governs several structural areas:

— Allocation of taxing rights on income with cross-jurisdictional sources — Foreign tax credit mechanics for taxpayers subject to both jurisdictions — Tie-breaker rules for taxpayers who would otherwise be tax-resident in both jurisdictions — Specific treatment of pension distributions, dividend income, interest income, royalty income, and capital gains — Permanent-establishment definitions for business operations — Mutual administrative assistance provisions

For US-citizen olim and dual-citizen Israeli-US taxpayers, the treaty operates alongside the US-Israel FATCA IGA, the 2026 Israeli worldwide disclosure regime, the Israeli 10-year foreign-source exemption, and the US worldwide-taxation Internal Revenue Code framework. The integrated cross-border planning architecture typically requires coordinated US and Israeli tax counsel.

The treaty's mutual administrative assistance provisions facilitate cross-border tax-information-exchange between the two tax authorities, supporting both routine compliance and specific examination cases.

See also: /glossary/fatca/, /glossary/worldwide-disclosure-regime/, /family-office-migration/pre-aliyah-restructuring/