In honor of Israel's 60th year, Finance Minister Ronnie Bar-On and Absorption Minister Yaakov Edri recently announced a series of proposed tax breaks and benefits for new immigrants (olim) and returning Israelis. A report on Israel's Channel 10 television station suggested Monday that Bar-On is planning more extensive investment
The reform package... includes a series of exemptions from taxes on income earned overseas.
incentives to attract Jewish billionaire immigrants.
The reform package, which includes a series of exemptions from taxes on income earned overseas, was proposed by the Absorption Ministry and the Tax Authority as part of the "Returning Home for Israel's 60th" campaign, aimed primarily at expatriate Israelis. The tax incentives were designed by a joint Tax Authority-Absorption Ministry team at the instruction of Minister Bar-On. The final package was designed to encourage both expatriate Israelis and other Jews in the Diaspora to move to Israel.
Minister Bar-On instructed the Tax Authority to draft the outlines of a bill the government could put forward based on the agreed tax reforms.
Among the tax breaks offered to new immigrants, including Israeli returnees, is a complete exemption from taxes and tax reporting on income earned abroad for a period of ten years. The exemption covers all forms of overseas income, such as capital gains, wages, business earnings, real estate sale or rent and more. According to the report on Channel 10, Minister Bar-On is preparing a plan to extend the exemption for immigrant Jewish billionaires to include other income, as well. Further benefits will be provided if the wealthy olim invest in areas outside of Israel's major urban centers.
At a press conference last week, Minister Bar-On said, "The tax reforms for new immigrants and returning citizens will help to reverse the brain drain, will strengthen the Israeli economy and increase growth." Encouraging immigration and the return of expatriates, Bar-On added, will also serve to "strengthen Israel as the national home of the Jewish people."
Absorption Minister Edry called the plan "a historic breakthrough that will make it possible for many Jews around the world and for hundreds of thousands of Israelis overseas to make the decision to come to Israel without fearing for their economic well-being." The new plan, in Edry's view, "combines for the first time value-centered incentives and immigration out of Zionist motives with economic incentives." The minister said that eliminating the tax burden will significantly increase the numbers of olim and of Israelis who return home.
Both Ministers Bar-On and Edry committed themselves to continuing to eliminate whatever barriers they can to Jewish immigration and to the return of expatriate Israelis.