Before you start

A determination of your Israeli tax residency — presence in Jerusalem long enough usually triggers it
A Teudat Zehut if you have made aliyah, or passport and visa details
A tax file, opened by your employer for PAYE or by you if self-employed
For arnona: the tenancy in your name and, if claiming the olim discount, your teudat oleh

Step-by-step

1
Settle your residency position before your first year-end
The test is centre of life — family, home and economic ties — backed by presumptions at 183 days in a year, or 30 days in a year totalling 425 across three. It can catch a remote worker under 183 days. The tax year is the calendar year.
OnlineWho: You, with an accountant if there is foreign income
2
Confirm whether the ten-year olim exemption applies
Olim and senior returning residents are exempt from Israeli tax on foreign-source income and foreign capital gains for ten years from becoming resident. It does not touch Israeli salary or Israeli freelance income. Anyone becoming resident from 1 January 2026 must now disclose foreign assets and income even though they remain untaxed.
OnlineWho: You
3
If employed, file Form 101 and let PAYE run
Your employer withholds income tax, National Insurance and health tax monthly. Submit Form 101 at hire and each January so credit points are applied. Most single-employer employees never file a return.
Via employerWho: Your employer
4
If self-employed, open income-tax, VAT and Bituach Leumi files
Choose osek patur below the small-dealer turnover threshold, which charges no VAT and files annually, or osek murshe, which charges VAT and files periodically. Standard VAT is 18% since 1 January 2025.
In personWho: YouRegister before issuing your first invoice
5
Register for arnona with the Jerusalem Municipality in your own name
Arnona is billed to the occupier, not the owner. Register at Safra Square or online with your lease. Getting the bill into your name is what lets you claim discounts, and doubles as the proof-of-address document banks and telecoms want.
OnlineWho: You
6
Claim the olim arnona discount inside the window
New immigrants can claim a substantial discount on up to 100 square metres for twelve months chosen from the first twenty-four after aliyah. You apply with your teudat oleh and a lease of at least twelve months, and the bill must be in your name. It is not applied automatically.
In personWho: You, at the municipality

Documents you’ll need

Teudat Zehut, or passport and residency proof
Form 101 for employees, or business registration for the self-employed
Teudat oleh if claiming either the ten-year exemption or the arnona discount
Tofes 106 annual employer wage and tax summary
Lease agreement for arnona registration

Things most newcomers don’t know

Arnona is charged per square metre by zone, so identical flats have different bills.

Jerusalem divides the city into classification zones charged at different rates, and the bill scales with the registered area of the flat rather than its rent or value. That means a large cheap flat in a high-rate zone can cost more in arnona than a small expensive one elsewhere. Ask for the zone and the registered square metreage before you sign, not after the first bill arrives.

Source: Jerusalem Municipality — arnona classification and rates

The olim arnona discount is generous, time-limited, and never applied automatically.

New immigrants can claim a large reduction on up to 100 sqm for twelve months, chosen from the first twenty-four after aliyah. Nobody will prompt you, the bill has to be in your own name, and you need a lease of at least twelve months and your teudat oleh. Because you choose the twelve months, it is worth spending them on your most expensive year rather than your first.

Source: Israeli arnona discount regulations; Nefesh B'Nefesh

The ten-year exemption covers foreign capital gains, not just foreign income.

Selling overseas shares, property or a business inside the window can be free of Israeli tax where the gain is foreign-source. Most olim know about the income side and underuse the gains side, and the difference against a 25% capital gains charge is substantial. Timing a disposal is a decision to take with an accountant early, not in year nine.

Source: Israel Tax Authority — olim and returning resident benefits

From 2026 the tax break survives but the privacy does not.

The reporting exemption that used to run alongside the ten-year tax exemption was abolished for anyone becoming resident on or after 1 January 2026. The foreign income remains exempt from Israeli tax, but it must now be disclosed to the Tax Authority. Olim relying on older guidance assume 'exempt' still means 'not reported', which is no longer true.

Source: Amendment to the Income Tax Ordinance effective 1 January 2026

Common mistakes to avoid

Assuming the ten-year exemption shelters Israeli salary or Israeli freelance income. It does not.
Treating the post-2026 disclosure duty as optional because the income is untaxed.
Leaving the arnona bill in the landlord's name, which forfeits the olim discount and your cleanest proof of address.
Burning the twelve-month olim arnona discount on a cheap first flat instead of saving it for a larger one.
US citizens forgetting that the Israeli exemption does not remove US filing, FBAR or FATCA obligations.

Some of this may be out of date. Spotted something inaccurate? Help us keep it right for the next newcomer.