Israel taxes its residents on a personal basis: an Israeli resident is liable to Israeli tax on worldwide income, while a foreign resident is liable only on income produced or accrued in Israel. The difference between the two statuses is the scope of income within the Israeli tax net. Residence is usually the first question to resolve, before any discussion of how income is classified or which country a treaty allocates the taxing right to.

This page sets out the normative framework: the statutory definition, the two quantitative presumptions, the foreign resident definition added in 2007, and how the courts weigh the connections in practice. The application of that framework to concrete cases is covered in the case law review linked at the end.

The test: centre of life

Section 1 of the Income Tax Ordinance defines an “Israeli resident” as an individual whose centre of life is in Israel. For that purpose the section directs that the individual’s family, economic and social connections be taken into account as a whole.

The Ordinance lists, without limitation:

• the location of the individual’s permanent home
• the place of residence of the individual and of the individual’s family
• the individual’s usual or permanent place of occupation, or permanent place of employment
• the location of the individual’s active and substantial economic interests
• the place of the individual’s activity in organisations, associations or institutions

The Ordinance prescribes no formula, no weight for any particular connection, and no minimum number of connections. The determination is made on the whole of the circumstances of the specific case.

Three principles from Gonen

The leading judgment in the Gonen case established three principles that still underpin the test.

The test is objective. It examines the connections as they exist in fact, not the taxpayer’s subjective intention. A declaration as to place of residence is not sufficient, and actual conduct must be examined. Subjective intention is relevant but not decisive.

A single connection is not enough. However strong, one connection does not determine the centre of life. The whole set of connections must be examined, family, economic, social and others, and weighed together, with each carrying a relative weight according to the circumstances.

The starting point is continuity of residence. An Israeli resident who leaves the country remains an Israeli resident, particularly one born and raised here, unless a transfer of the centre of life is proved. The burden of proving severance rests on the taxpayer, and it is a heavy one. Departure alone does not sever residence. What is required is proof that the centre of life moved.

The two quantitative presumptions

Alongside the qualitative test, the Ordinance sets two presumptions based on days of presence.

Three points:

Both presumptions are rebuttable by either side. They may be rebutted by the individual and by the assessing officer alike. Someone present in Israel for more than 183 days is not automatically an Israeli resident. In the other direction, someone present for very few days has no presumption in their favour, and the absence of a presumption does not establish foreign residence.

A day includes part of a day. For the purposes of the quantitative presumptions, a day includes part of a day. The day of arrival and the day of departure are both counted. In borderline ranges that difference can decide the outcome.

The second presumption is tested separately for each tax year. It aggregates the tax year with the two preceding years, so one three year window can meet the threshold while the window for the following year does not, without any dramatic change in behaviour. In the Tzur case the second presumption was met for 2006 and not met for 2007, because the total for that year and the two preceding years came to only 411 days. Anyone assessing their position needs to compute the aggregate for each year separately rather than looking only at the current year’s count.

A strong presumption

In the Tzach case, decided by the Tel Aviv District Court on 1 June 2026, the court held that the day count presumption is a strong one. Comparing centres of life is not enough to rebut it. Convincing evidence to a high standard is required to explain why it should be disregarded, including an explanation of why someone with no apparent centre of life in Israel spends so much time there. A relative’s illness is not a sufficient explanation unless it is shown that the time in Israel was devoted to it.

Two parallel centres of life

In the same case the court held that in modern conditions a person can maintain substantial ties in several places at once, and that comparing the countries does not compel the conclusion that there is one single centre of life. The court referred to Hasarma, Civil Appeal 7719/21, where the taxpayer was found to have run two centres of life. The practical consequence runs the other way from how it sounds. Where there are two centres and the taxpayer also meets the centre of life tests in Israel, he is an Israeli resident. A parallel argument, that the choice between the countries should be made on the domicile principle, was rejected because that principle has not been adopted in Israeli tax legislation.

The foreign resident definition and the 2007 alternative

Until 2007 the definition of “foreign resident” was simple and residual: a person who is not an Israeli resident. In 2007 the Ordinance was amended and an alternative was added, under which a “foreign resident” is also an individual who satisfies two cumulative conditions:

• presence outside Israel of at least 183 days in each of two tax years, the tax year and the year following it
• the individual’s centre of life was not in Israel in the two tax years thereafter

Two features:

The first is that the alternative operates retrospectively. Status in the year of departure is determined by what happens over the following four years. A person who left in 2025 and was outside Israel for at least 183 days in each of 2025 and 2026, but only moved their centre of life in 2027 and 2028, will be treated retrospectively as a foreign resident from 2025. The consequence is that during the departure years themselves the status is not known with certainty.

The second is the relationship between the two definitions. In the Ploni case it was held that the foreign resident definition does not contradict the day count presumption for Israeli residence, and that there is no legal competition between them. A person who satisfies the Israeli resident definition is classified as such even if the conditions of the foreign resident alternative are also met. That was confirmed in the Tzach case.

How the connections are weighed

Family connections

The case law treats the place of residence of the nuclear family, spouse and minor children, as a strong indication of the centre of life. In cases of split families or international marriages, however, the weight of that connection is reduced. In the Sapir case the taxpayer was held to be a foreign resident even though his family remained in Israel and he visited frequently, because the majority of his connections were shown to be in Singapore. In the Ploni case, on similar facts, the opposite result was reached.

Economic connections

The case law distinguishes active income, arising from employment or an active business, from passive income. The source of active income is treated as the more significant connection for centre of life purposes. The scale of Israeli assets is also weighed: in the Ploni case the taxpayer held assets in Israel of some NIS 89 million, which counted against him. The court rejected the argument that a numerical balance should be struck between Israeli and foreign assets, but held that the scale of the Israeli assets was a significant connection.

In the other direction, in the Sapir case it counted in the taxpayer’s favour that he formed no new economic connections to Israel beyond those he had before leaving: he acquired no new assets and opened no new businesses here.

Tax residence elsewhere

Across the reported cases, considerable weight attached to whether the taxpayer acquired tax residence in another country. In Sapir, being a Singapore tax resident and paying tax there, even at a low rate, supported his position, and in Tzur the payment of tax in Hong Kong was weighed. Conversely, in the Rafi Amit case it counted against him that he acquired no residence or citizenship elsewhere and opened no tax file in another country, and in Ploni it counted against the taxpayer that he was not treated as a tax resident of any other country. A person who is a tax resident nowhere has difficulty pointing to an alternative centre of life.

The concept of a permanent home

The Ordinance does not define “permanent home”, and the courts have developed criteria for it. In the Rafi Amit case the significant criterion was held to be the availability of the place for the person’s use, legally and physically, at any time. Some degree of actual use is also required, and domestic use characterised by a routine of living, as distinct from a stay in a hotel.

Two situations follow: an individual may have a permanent home in several countries at once, or no permanent home in any country, as was argued in the Bar Refaeli case. In both, the permanent home is not determinative and the remaining connections must be examined.

What to document, and when

The centre of life question is decided on the facts. Documents created contemporaneously by a third party, for a purpose other than tax, tend to carry more weight than an affidavit prepared after an assessment proceeding has opened.

The known difficulty in applying the test

A review of the case law shows a difficulty in applying the centre of life test consistently. Cases with similar facts sometimes end in different results, and the outcome depends heavily on judicial discretion. The centre of life test was formulated before the modern patterns of living developed, among them digital nomads, global families, and professions that require constant mobility.

That difficulty has a practical cost. Residence disputes are long and expensive: the Ploni case ran for about twelve years and was heard in the district court and the Supreme Court. The uncertainty impairs a taxpayer’s ability to plan and creates exposure to a retrospective determination covering years already past.

Against that, the flexibility also allows the test to accommodate unusual circumstances and reach a just result in cases a rigid day count formula would not reach. What emerges from the case law is that Israeli residence was found in most cases, and that the few successes, among them Sapir and Tzur, rested on a strong evidentiary record.

What may change

In 2021 a committee on reform of international taxation sat, with participation from the Tax Authority and the professional institutes. On residence, the committee identified four problems: legal uncertainty, the burden on the courts, increased friction with the Tax Authority, and a gap from the international norm, on the committee’s findings that in the countries it reviewed the quantitative presumptions, where they exist, are not rebuttable. That finding is disputed.

The committee recommended a two tier system: conclusive presumptions that would determine status where they apply, alongside the continued operation of the centre of life test and the rebuttable presumptions for cases the conclusive presumptions do not cover. Three conclusive presumptions of Israeli residence were proposed: presence of 183 days or more in each of two consecutive tax years, in which case residence would be fixed from the date of arrival in the first year; presence of 100 days or more in the tax year where the spouse or children under 18 are Israeli residents; and presence of 100 days or more in the tax year where the total for that year and the two preceding years is 450 days or more, save for a person present 183 days or more in each of those years in a treaty country who produces a certificate of residence from it. Two conclusive presumptions of foreign residence were proposed: presence of no more than 30 days in each of five years, the tax year and the four preceding years; and presence of no more than 60 days in the tax year, the preceding year and the two following years, provided the centre of life was not in Israel in those two years.

Following the committee’s recommendations a draft bill memorandum was published, and after public comments a revised memorandum was published which is stricter than the committee’s recommendations. As at the date of this update the memorandum has not been enacted. No planning should be based on wording that has not been enacted, and the binding law is as described above.

Where to go next

Last updated: 5 September 2026

This page is a general overview only. It is not legal or tax advice and should not be relied on in making decisions. The centre of life question is factual and depends on the circumstances of each case.