New Bill Redefines Israeli Residency: Just 75 Days Could Be Enough

On July 2, 2025, a draft bill was published regarding an individual’s place of residence, focusing on counting days of presence in Israel and establishing conclusive presumptions that override the “center of life” test.

As a reminder, in November, conclusions were published by a committee for reform in international taxation, chaired by then Deputy Director for Professional Matters, Roland Im-Shalem, CPA (also a jurist).

Among other things, the committee established the following conclusive presumptions regarding residency:

• An individual who stayed in Israel for more than 183 days for two consecutive years will be considered an Israeli resident starting from the first year.
• An individual who stayed in Israel for 100 days or more in the tax year, and the total number of days stayed in the tax year and the two preceding years is 450 days or more, will be considered an Israeli resident in the tax year. This presumption will not apply if the individual stayed 183 days or more in each of the relevant years in another country that has a tax treaty with Israel, subject to providing a certificate of residency from the treaty country.
• An individual who stayed in Israel for 100 days or more and whose spouse is an Israeli resident will be considered an Israeli resident. For this purpose, “spouse” includes a common-law partner—i.e., someone with whom the individual maintains a joint household and who is an Israeli resident.
• An individual who stayed in Israel for fewer than 30 days in each tax year for four consecutive years will be considered a non-resident starting from the first year.
• An individual who stayed in Israel for fewer than 30 days in each tax year for three consecutive years will be considered a non-resident starting from the second year.

A draft in the spirit of the committee’s conclusions was published two years ago, in July 2023.

The new draft significantly tightens the rules compared to the committee’s conclusions and the previous draft.
The explanatory notes of the new draft, which claim its goal is to enhance certainty, are inconsistent with property rights and with globally accepted principles regarding residency presumptions.

“Three-year period” refers to:

• The tax year and the two preceding years;
• The tax year, the previous year, and the following year;
• The tax year and the two following years.

“Weighted days of presence” is a calculation method that gives different

weights to days of presence based on their proximity to the examined tax year:

• Each day in the tax year = full day;
• Each day in the year before or after the tax year = one-third of a day;
• Each day in the two years before or after the tax year = one-sixth of a day.

The new draft establishes the following presumptions for Israeli residency:

• An individual who stayed in Israel for 75 days or more in a tax year and who, in a weighted count over the three years ending with the examined tax year, was present in Israel for 183 days or more, will be considered an Israeli resident for that tax year.
  For this purpose, the weighted count will include: all days in the tax year + one-third of the days in the previous year + one-sixth of the days in the year before that.
  Example: If a person stayed in Israel for 120 days in 2026, 120 days in 2027, and 130 days in 2028 (the examined tax year), the 75-day condition is met, and the 183-day condition is also met:
  120/6 + 120/3 + 130 = 20 + 40 + 130 = 190 > 183
• An individual who stayed in Israel for 30 days or more in a tax year and whose spouse is an Israeli resident, and who, in a weighted count over the three years ending with the tax year, was present in Israel for 140 days or more, will be considered an Israeli resident for that tax year.
  Calculation is the same as above.
  Example: If a person stayed in Israel for 150 days in 2026, 120 days in 2027, and 80 days in 2028 (examined year), and their spouse is an Israeli resident:
  150/6 + 120/3 + 80 = 25 + 40 + 80 = 145 > 140

The new draft establishes a conclusive presumption for non-residency:

• An individual who stayed in Israel for 74 days or less in a tax year and who, in a weighted count over the three years ending with that year, was present in Israel for no more than 110 days, will be considered a non-resident.
  Example: If a person stayed 90 days in 2026, 60 in 2027, and 50 in 2028 (examined year):
  90/6 + 60/3 + 50 = 15 + 20 + 50 = 85 < 110
• An individual and their spouse who stayed in Israel for 90 days or less in a tax year and who, in a weighted count over the three years ending with that year, stayed for no more than 125 days, will be considered non-residents.
  Example: If the couple stayed 102 days in 2026, 78 in 2027, and 77 in 2028 (examined year):
  102/6 + 78/3 + 77 = 17 + 26 + 77 = 120 < 125

My position is that the draft creates certainty mainly for the Tax Authority but violates the understandings reached by the International Tax Reform Committee in November 2021—understandings I did not agree with even then. Therefore, one certainly cannot claim that the new draft reflects any agreement with the professional bodies.

The understanding in the committee was a conclusive presumption of 183 days of presence per year over two consecutive years. Now, a conclusive presumption is created for 75 days with a weighted presence of 183 days across the examined tax year and the two preceding years.

The slight relaxation in the non-resident presumption from 30 to 75 days does not in my view “soften” the severity of the 75-day residency presumption.

That said, most practical discussions relate to residents of treaty countries, so this legislative amendment has limited impact since the treaty prevails over domestic law.