38 to act with much greater flexibility. Israeli companies can now offer a more attractive corporate structure to investors and grow more organically by acquiring other companies.” Additionally, they highlight what the reform means for exits and crossborder deals: “Clear guidelines on intellectual property valuation and transfer pricing methods significantly reduce uncertainty in exit scenarios involving multinational buyers, allowing companies and their investors to better plan their exit strategies and understand their expected tax liabilities in advance. The ability to obtain pre-rulings on transfer pricing enables multinational corporations operating R&D centers in Israel to structure their operations with full confidence in their tax position, encouraging long-term investment and expansion in Israel. The simplified M&A processes encourage Israeli companies to grow through mergers, creating larger and more competitive players in both the local and global markets.” The Government of Israel has released draft resolutions tied to the 2026 state budget, including a proposal titled “Encouraging Aliyah and Return to Israel through Tax Benefits.” The measure would grant a temporary tax exemption to individuals who become Israeli residents for the first time in 2026, as well as to veteran returning residents. The reform is also aimed at Israelis abroad who might otherwise hesitate to return because of unclear or punitive tax treatment of their equity compensation. Historically, professionals working abroad and holding stock options or RSUs often faced uncertainty regarding their tax obligations upon returning to Israel. But that’s all changing now. Daniel Paserman, head of Tax Department at Gornitzky GNY, together with fellow partner Adi Haya Raban, authored a key update explaining the proposal: “According to the proposal, an individual who immigrates to Israel during 2026 (and during that year only) and qualifies as a “first-time resident” or a “veteran returning resident” (i.e., an individual who has been a foreign resident for ten consecutive years prior to returning to Israel) (collectively, “Eligible Individuals”), will be entitled to an exemption on Israeli-sourced earned income as follows: for 2026–2027, up to NIS 1,000,000; for 2028, up to NIS 600,000; for 2029, up to NIS 350,000; for 2030, up to NIS 150,000. Israelisourced earned income exceeding the above exemption thresholds will be Welcome home
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