Tax Authority warns higher income Israelis are leaving

Not only has the number of Israelis emigrating from Israel increased in recent years, but their economic profile has also changed. More high-income earners, tech employees, healthcare professionals, and people in the prime of their careers are moving abroad. This is according to a new study by the Israel Tax Authority’s Planning and Economics Division, which examined the income and tax payments of Israelis who emigrated from the country between 2015 and 2024.

According to the study, the number of Israelis who left the country has risen by about 50% compared with the years before the Covid pandemic, but the tax they paid in the year before their departure jumped at a much sharper rate. Until 2019, the income tax paid by Israelis leaving the country amounted to about NIS 500 million per year, while in 2023 and 2024 the amount reached about NIS 1.2 billion each year.

The Israel Tax Authority defines this as a potential tax loss of about NIS 700 million for each year of emigration. However, this is not necessarily an immediate or complete loss of income: some leavers may continue to be considered Israeli residents for tax purposes and some continue to pay taxes in Israel even after they leave. Residency is determined individually and usually only retrospectively.

The authors of the study, Dr. Ariel Greizaz and Nili Ben-Tovim, note that it is difficult to determine what is behind the change. According to them, it may be related to changes in the job market and society following the Covid pandemic, but it is also possible that it is a response to the political, defense and geopolitical developments since the beginning of 2023.

Potential damage to state tax revenues has increased

The data show that the increase in immigration is not evenly distributed among population groups. The rate of Israelis emigrating from the top decile increased from about 0.3% per year in the past to more than 0.5% in 2024, – a jump of about 80%. In the lower deciles, however, the rate of those emigrating has remained stable throughout the decade and has even decreased in some cases.

The top decile is currently responsible for about 67% of all income from those emigrating and about 86% of the income tax they paid before their departure. Therefore, the change in the composition of those emigrating explains why the potential damage to state tax revenues has increased much more than the number of emigrants themselves.

Emigration from Israel continues at peak levels – study

The average income of those emigrating has also increased sharply. In 2015-2019, their average annual income in the year before departure was about NIS 125,000. In 2024, it reached about NIS 200,000, a real increase of about 60%. While in the past, the income of those leaving was similar to the average income in the economy, today it is about 50% higher.

The change is also noticeable in distribution by age. Among those aged 20-30, the rate of emigration has remained stable for about a decade, around 1% per year. In contrast, among those aged 40-50, it increased from about 0.4% to about 0.7% in 2024, a jump of about 60%. The share of this group among those leaving over the age of 20 increased from 13% about a decade ago to about 20% today.

This is an age group that is usually at the peak of their careers and income. Accordingly, the total income of those aged 40-50 before their departure tripled from about NIS 900 million per year to about NIS 2.7 billion shekels. The tax paid by members of this group before their departure increased by about 165%.

Employment sectors also indicate a growing exodus of high-wage earners. The number of people leaving high-tech has risen by about 150%, and the number leaving the healthcare sector has increased by more than 100%. In sectors with lower wages, including education and manufacturing, there has been no significant change.

Four times as many Israelis spending more than NIS 500,000 abroad

Along with the emigration data, the study indicates a major rise in the number of Israelis reporting to the Tax Authority that they spent more than NIS 500,000 abroad. In 2023-2024, the number of Israelis reporting this doubled, while among those who left the country, there was a fourfold jump.

However, the figure does not reflect the full extent of the transfer of funds abroad. The report is included in the annual form submitted mainly by the self-employed and those with high incomes and does not cover the entire public. In addition, the Tax Authority only knows that an amount exceeding NIS 500,000 was transferred, and not what the exact amount was spent in each case.

The authors of the study raise the possibility that the trend reflects a shift by some Israelis to a strategy of risk diversification, by holding a larger portion of their assets abroad. They stress that these are still only a few hundred of those reporting, but believe that in view of the sharp increase in their number, the phenomenon should continue to be monitored.

For the purposes of the study, those emigrating were defined as citizens who stayed outside Israel for at least 90 consecutive days in the year of departure and more than 270 days in the following year. In order to neutralize temporary departures, only those who had lived in Israel for at least three years before their departure were included in the analysis. Therefore, the definition in the study is not essentially the same as the definition of a foreign resident for tax purposes.

Published by Globes, Israel business news – en.globes.co.il – on August 6, 2026.

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