Who Is Considered an Israeli Resident for Tax Purposes?
Tax residency in Israel is determined by the center-of-life test set out in Section 1 of the Income Tax Ordinance: an Israeli resident is a person whose center of life is in Israel, based on the totality of their family, economic, and social ties. Alongside this test, there are two presumptions based on days of presence — 183 days in the tax year, or 30 days in the tax year and 425 days over three years — both of which are rebuttable. An Israeli resident is taxed on worldwide income, while a foreign resident is taxed only on income derived in Israel.
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What the Law Says
The definition appears in Section 1 of the Ordinance. To determine where an individual's center of life is located, the Ordinance lists five indicators, "inter alia," meaning the list is open-ended:
The location of the individual's permanent home.
The place of residence of the individual and their family members.
The place of the individual's regular or permanent occupation, or place of permanent employment.
The location of the individual's active and substantial economic interests.
The place of the individual's activity in organizations, unions, or various institutions.
Alongside these indicators, the legislature established two presumptions. You are presumed to have your center of life in Israel if you were present in Israel for 183 days or more in the tax year, or if you were present for 30 days or more in the tax year and the total days of presence in that tax year and the two preceding years reached 425 days. Part of a day counts as a full day. The presumptions are rebuttable — by the taxpayer as well as by the assessing officer.
A person to whom one of the presumptions applies and who claims not to be an Israeli resident must file a return detailing the facts on which they rely, pursuant to Section 131(a)(5e) of the Ordinance.
Foreign Resident and Rules That Override the Test
A foreign resident is, first and foremost, a person who is not an Israeli resident. The Ordinance adds a four-consecutive-year track: an individual who was present outside Israel for at least 183 days in each of two consecutive tax years, and whose center of life was not in Israel in the two years that followed.
Two sources override the center-of-life test. The Income Tax Regulations (Determination of Individuals Deemed Israeli Residents and Determination of Individuals Not Deemed Israeli Residents), 5766-2006, govern special cases. A double-tax treaty overrides domestic law by virtue of Section 196 of the Ordinance, so that a person considered a resident of both countries is resolved under the treaty's tie-breaker rules for the purposes of the treaty's relief provisions.
How the Courts Examine Center of Life
The court examines the full picture for each tax year, and family carries significant weight. In CA 4862/13 Assessing Officer Kfar Saba v. Sapir (20.5.2014), the Supreme Court wrote that "as a rule, a person's center of life and permanent home is where their family resides and lives."
When the days-of-presence presumption is met, the burden shifts to the taxpayer. In CA 3328/15 John Doe v. Assessing Officer Ashkelon (22.2.2017), the appellant conducted business abroad and was not present in Israel for 183 days in any of the years 2005–2007, yet he met the 425-day presumption. The Supreme Court held that the burden of rebutting the presumption fell on him, and that the number of days of presence in Israel was in itself evidence of a substantial nexus. His home in Israel was deemed a permanent home, and he was determined to be an Israeli resident.
For example: a person who was present in Israel for 170 days in 2024, 160 days in 2025, and 100 days in 2026 exceeded the 30-day threshold in 2026, and the total days of presence over the three years is 430. The 425-day presumption applies to them in 2026, even though they were in Israel for fewer than 183 days that year. To be considered a foreign resident, they would need to show that their center of life was not in Israel.
The Tzach Ruling (June 2026)
On 1.6.2026, the Tel Aviv District Court held that a businessman who had operated for years in Nigeria was an Israeli resident for the 2009–2017 tax years (TA 62852-01-23 and related cases, Tzach v. Assessing Officer for Large Enterprises). The primary reasoning was that the appellant had not rebutted the days-of-presence presumption. The court also rejected his alternative claim that he was a veteran returning resident, because the days-of-presence presumption was also met for the years 2004–2008.
There is no tax treaty between Israel and Nigeria, so there was no tie-breaker rule between the two countries. The judge noted that she did not need to decide whether the appellant had two parallel centers of life, because the days-of-presence presumption had not been rebutted. This is a District Court decision, not a binding Supreme Court precedent.
What the 2025 Draft Bill Proposed
In July 2025, the Ministry of Finance published for public comment the Draft Bill to Amend the Income Tax Ordinance (Place of Residence of an Individual). The draft bill proposes to abolish the rebuttable presumptions and replace them with irrebuttable presumptions based on "weighted days of presence": a day in the tax year counts as one day, a day in the year before or after counts as one-third of a day, and a day in the second year before or after counts as one-sixth of a day.
Israeli resident: 75 days or more in the tax year and 183 weighted days in one of three three-year periods. Or 30 days and 140 weighted days, where the spouse is a resident under the first presumption.
Foreign resident: 74 days or fewer in the tax year and up to 110 weighted days in each of the periods. Or up to 90 days for you and your spouse, and up to 125 weighted days for each of you.
In the example above, the weighted days of presence for 2024–2026 total approximately 182 (100, plus one-third of 160, plus one-sixth of 170). That is less than 183, so for that period the irrebuttable presumption would not have applied, and center of life would have been examined in the ordinary manner.
The draft bill also proposes a rule for the date on which residency begins and the date on which it ends: a short visit of up to 21 days does not shift the date, subject to the conditions set out in the draft. This is a second attempt, following a similar draft bill dated 24.7.2023. According to our review, as of 15.10.2026 the draft bill has not been enacted into law, and the law in force is the center-of-life test with rebuttable presumptions. According to its text, if enacted, it would apply from the tax year following the commencement year.
When You Should Have Your Case Reviewed
The residency question arises when life is split between two countries. In the following situations, it is advisable to count days and document ties right away:
You moved abroad for work, while your spouse and children remained in Israel. In the Sapir and Tzach cases, the family remaining in Israel was a central consideration.
You were present in Israel for fewer than 183 days in a year but visited frequently. The 425-day presumption may apply to you.
You maintained an apartment available for your use in Israel, along with bank accounts and an active business.
You are relocating to a country that has no tax treaty with Israel, meaning there will be no tie-breaker rule between the two countries.
You are planning to return and apply for veteran returning resident status, which requires at least 10 consecutive years as a foreign resident. We detail its benefits on our page about taxation of new immigrants and returning residents.
We explain severance of residency, tax treaties, and reporting of foreign assets on our international tax attorney page.
This area is handled at the firm by Adv. & CPA Shlomi Vaknin, who spent 18 years as a senior partner at a tax firm before founding the firm in 2024.
