Middle East
Israel tax rates 2026
Worldwide income is taxed on a progressive scale that tops out at 50%. The corporate rate is 23%, and new immigrants, known as olim, receive a 10-year exemption on foreign income.
The taxes
| Personal income (top) | 50%Rates are progressive up to 47%, plus a 3% surtax on income above ~ILS 721k. That brings the top marginal rate to 50%. |
|---|---|
| Corporate income | 23% |
| Capital gains | 25%, or 30% for substantial shareholders, plus a 3% surtax. |
| VAT / VAT, known locally as Ma'am. | 18% |
| Dividends (WHT) | 25%, or 30% for substantial shareholders. |
| Interest (WHT) | 15–25% |
| Royalties (WHT) | 23–25% |
| Social security (employee) | About 12%, combining National Insurance and health tax at the top bracket. |
| Social security (employer) | 7.6% at the top bracket. |
| Wealth tax | None |
| Inheritance / estate | None. Abolished in 1981. |
| Property tax | A municipal tax called Arnona, plus a progressive purchase tax called Mas Rechisha on acquisitions. |
| Other | A 3% surtax on high income, already included in the 50% top rate, plus an additional surtax on capital income starting in 2025. |
How the system works
- Tax system
- Worldwide (residence-based)
- Foreign income
- Taxed (worldwide)
- Taxes by citizenship
- No
- Exit tax
- Yes, leaving has a cost
- CFC rules
- Yes
- CRS
- Participating
A special regime for new arrivals
New immigrants (olim chadashim) and senior returning residents get a 10-year exemption on foreign-source income and gains, under Amendment 168 from 2008. The reporting exemption itself was repealed by Amendment 272, effective 1 January 2026. Separately, a new regime running only through 2026 exempts Israeli-source active income up to a declining ceiling, for anyone arriving between 5 November 2025 and 31 December 2026.
Rates checked July 2026: the top marginal income tax rate, the standard VAT rate and the main corporate rate.
Ways to relocate to Israel
The residency and citizenship routes that lead here, weighed against the tax picture above.