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World Jewish News
Diaspora Businessmen to be "lured" into Israel by 10 years Without Taxes
29.12.2008
A new program to support the repatriation of businessmen is underway: 10 years with no taxes accrued on any revenues earned outside of Israel. The Ministry of Absorption and the Tax Office see the new system as a powerful motivation to attract wealthy Jews into Israel during the world crisis.
The Director-General of the Ministry of Absorption Erez Halfon told the IzRus portal that the new program to support the repatriation of businessmen from the diaspora was approved of on the governmental level. It is designed for those who intend to make Aliyah in 2009, as well as the "returning citizens" (toshav hozer). They will be granted 10 years of full exemption from taxes on all income received by businessmen and their companies outside Israel.
"For ten years a person will have no relations with tax administration. This will apply both to new immigrants, and to the citizens of Israel who spent more than 5 years abroad," said Halfon. He also noted that in a situation where such a businessman buys an Israeli company, he will pay taxes like any citizen of the country. Erez Halfon stressed that the state does not directly budget for this program, but implicitly denies tax proceeds it could get.
The IzRus portal asked Gideon (Gidi) Bar Zakai, deputy director general of the Israel Tax Authority, to comment on professional issues. Bar-Zakai noted that "the program was developed and approved of by the Knesset even before the global economic crisis." Therefore, it can not be regarded as encouragement for those who have stalled until a sharp financial recession abroad, and now want to repatriate. But "it luckily coincides with a period when many Jewish businessmen from the diaspora were considering moving to the relatively financially stable Israel," he said.
"We have developed an attractive platform for businessmen. We say to them: after your arrival in Israel, we do not care for your economic activities beyond our borders - we are not concerned, and we refuse to take these taxes," said Gideon Bar-Zakai. He also added that the program was based on the English version of tax concession: “Many Jews, particularly those from the former Soviet Union, move to England because of the convenience of the tax regime."
"If you're afraid and do not trust Israel - you have 10 years to try it out," said Bar-Zakai. It is possible not to take the immigrant status immediately, being just a "foreign resident" for a year. This trial year will later be counted within those 10 years. If after the first year the person decides to stay, he will be given such an opportunity.
Meanwhile, in the CIS countries many businessmen of Jewish descent have Israeli citizenship along with the passports of their countries. All of them are perfectly covered by this new program of the Ministry of Absorption and the Israel Tax Authority.
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