המאמר התפרסם לראשונה באתר
8.12.2025
Note: If an individual does not fall into any "Conclusive Presumption" (neither Resident nor Foreign), the determination reverts to the traditional "Center of Life" test.
December 8, 2025
The article was first published in
A new legislative memorandum regarding tax residency, published recently by the Ministry of Finance, proposes a paradigm shift that could fundamentally alter the lives of thousands of Israelis and expats. Whether you are a family planning relocation, a businessperson with international operations, or a high-net-worth individual splitting time between countries, the rules of the game are about to change.
For decades, the Israeli tax system has relied on the "Center of Life" test—a subjective, flexible standard based on family ties, economic interests, and physical presence. The new proposal seeks to replace this flexibility with rigid mathematical formulas and "Conclusive Presumptions" that cannot be challenged in court.
Here is an in-depth analysis of the proposed changes and their practical implications.
The Current Situation: The "Center of Life" Test
Under current law, residency is determined by the "Center of Life" test. While there are numerical presumptions (such as the 183-day rule), they are currently rebuttable. This means a taxpayer can prove that despite spending time in Israel, their center of life is elsewhere—or conversely, the Tax Authority can argue that someone is a resident even if they spent fewer days in the country.
The Revolution: Conclusive Presumptions
The memorandum proposes a dramatic departure: the total abolition of rebuttable presumptions. In their place, the state introduces Conclusive Presumptions. Once a taxpayer meets the mathematical criteria set in the law, they will be deemed an Israeli resident (or a foreign resident) regardless of their subjective intent or where their actual "center of life" may be.
New Conclusive Presumptions for Israeli Residency
An individual will be deemed an Israeli resident if they meet one of the following tracks:
New Conclusive Presumptions for Foreign Residency
An individual will be deemed a Foreign Resident if:
Note: If an individual does not fall into any "Conclusive Presumption" (neither Resident nor Foreign), the determination reverts to the traditional "Center of Life" test.
The most innovative aspect of the proposal is the "Weighted Days" formula. The Tax Authority will look at a five-year window: the current year, the two preceding years, and the two subsequent years.
The Formula:
The "Tail of History" Trap:
Consider a citizen who lived in Israel for years and emigrates. Even if they spend only 100 days in Israel during their departure year, the mathematical weighting of their previous years’ full presence could push them over the threshold (183 weighted days), locking them into Israeli tax residency for that year despite having physically moved abroad.
The proposal introduces a strict definition for a "Visit" regarding the start and end dates of residency in a transition year.
Q: When will this new law take effect?
A: According to the memorandum, the law will apply to the tax year following the year it is passed. If passed in 2025, it will likely apply from January 1, 2026.
Q: Can I appeal a "Conclusive Presumption" if my center of life is clearly abroad?
A: No. That is the meaning of "Conclusive." If you meet the mathematical criteria (e.g., 75 days + weighted history), you are a resident under domestic law, even if your home and work are abroad. Your only escape route would be an International Tax Treaty.
Q: What happens if I don't meet the criteria for "Israeli Resident" OR "Foreign Resident"?
A: You fall into the "gray zone." In this case, the old "Center of Life" test applies. You will have to prove your residency based on family ties, economic interests, and housing, just as in the past.
Q: I am on relocation. How does this affect me?
A: You must be extremely careful with visits to Israel. A summer visit combined with your history of living in Israel could keep you classified as an Israeli resident for tax purposes for years after you leave.
Q: Does this affect new immigrants (Olim)?
A: Yes. The determination of the start date of residency is crucial for the 10-year tax holiday. The new "Visit" rules (21 days) could accidentally trigger your residency start date earlier than you planned, potentially wasting part of your tax benefits or creating tax liabilities on assets sold prior to your official move.
