The Rights and Duties of Israeli Residents Abroad
Many Israelis decide to move abroad for a certain period, whether for work purposes, academic studies, family reasons, establishing a business, or any other reason. It is important for this population to understand what their rights are, and what consequences they face by staying abroad, such as their status at the National Insurance Institute, at the relevant Health Maintenance Organization (kupat holim), and at the income tax authorities. Our law firm has extensive experience in assisting with immigration and Aliyah to Israel and with emigration from Israel abroad, and this article answers some common questions that our clients have about the rights of Israeli residents staying abroad.
Israeli Residents Abroad
An Israeli resident is an individual who has a stay permit or legal status that grants Israeli residency and whose center of life is in Israel. However, an individual may still be considered an Israeli resident even if they are staying abroad for a certain period of time, as long as their center of life remains unchanged. The status of residency has a significant impact on the various rights and duties that the Israeli resident has while staying abroad.
Relevant for Israeli Citizens as Well as Permanent Residents
Israeli residents who are not Israeli citizens and who are staying abroad for a long period of time usually lose their permit to stay in Israel and, along with it, their Israeli residency. Therefore, this article was written mainly for Israeli citizens abroad. However, this article may also be relevant for Israeli residents who are not Israeli citizens and, specifically, for those who hold a license to stay in Israel permanently. In this context, the difference between permanent residents and citizens is the length of time that they may stay abroad without losing their Israeli legal status. Citizens may stay abroad for as long as they wish, while permanent residents will lose their Israeli legal status after seven years, or under other circumstances stipulated in the law.
Israeli citizens and Israeli permanent residents staying abroad (hereunder: Israeli residents abroad) have rights and duties that do not terminate once they leave Israel.
Duties:
- Income tax payments
- National Insurance contributions
- Health insurance payments
- Military reserve duty
Rights:
- National Insurance benefits
- National health services
- Consular services
Income Tax Authorities
All individuals who are considered by the income tax authorities to be Israeli residents must pay income tax. This definition of residency applies to anyone whose “center of life” is in Israel, which is determined by the totality of their family, economic, and social connections. To make it easier to determine who is considered by the tax authorities as a resident, the two following quantitative presumptions have been established according to which the center of life of a certain individual for a chosen tax year is determined in Israel:
- If during that year the individual stayed in Israel for 183 days or more, where part of a day is also counted as a day.
- If during that year the individual stayed in Israel for 30 days or more, and the total amount of days that they were in Israel during the 1-2 previous years was 425 days or more, where part of a day is also counted as a day.
However, these are only presumptions, and there may be situations in which the center of life of an individual remains in Israel despite a prolonged visit abroad. In these situations, the tax-payer is required to continue paying income tax to the Israeli authorities.
Only One Center of Life
According to the definition in the Income Tax Ordinance and Israeli case law, only one center of life is allowed at any given moment. Therefore, it is not possible to be both an Israeli resident and a foreign resident. This situation is intended, inter alia, to protect tax-payers from double liability, and is expressed in the Ordinance. The definition of foreign resident is basically anyone who is not an Israeli resident. Therefore, determining the center of life also determines the country in which tax liability applies. Anyone staying abroad who is still an Israeli resident according to the Ordinance is required to pay income tax to the Israeli authorities.
National Insurance Institute
National Insurance Duties
Israeli residents are required to make National Insurance and health insurance contributions to the National Insurance Institute (Bituah Leumi) for as long as they keep their residency. Any resident who keeps up with these payments is eligible to full National Insurance benefits.
To determine the eligibility of an individual who was an Israeli resident and is staying abroad, the Israeli National Insurance Institute, too, determines residency by the ‘center of life.’ The center of life is determined by both:
- objective criteria: place of living, family, place of work, assets in Israel; and
- subjective criteria: the place perceived by the individual themselves as their center of life.
Cancellation of Residency per the National Insurance Institute
Automatic Cancellation
If no other information reaches the National Insurance Institute during the first five years in which an Israeli resident is abroad, the resident will still be required to make national insurance payments. Therefore, the resident will still be eligible to various benefits and to national health services. However, after five years of staying abroad, the Israeli residency is considered by the National Insurance Institute to be cancelled.
Intentional Cancellation
It is possible to request for the Israeli residency to be cancelled by submitting “Form 627 for determining residency of persons living abroad,” along with additional documents, to the National Insurance Institute. This procedure requires bringing proof that the center of life has changed and is no longer in Israel.
Extending the Period of Residency per the National Insurance Institute
The residency may be extended for National Insurance purposes by proving that, despite staying abroad, the center of life still remains in Israel and the stay abroad is temporary, not permanent. This procedure requires submitting Form 627 mentioned above, along with additional documents, to the National Insurance Institute.
Staying in a Country Which Has Signed a Mutual Social Insurance Convention with Israel
Israel has signed social security conventions with a number of countries. Therefore, if an Israeli resident is staying abroad in one of these countries and makes lawful social security contributions in that country, they do not need to make contributions to the National Insurance Institute in Israel, and they will still be eligible to National Insurance benefits in Israel. In case social security payments were made in the foreign country as well as in Israel, a refund for the double payment will be possible. An updated list of the countries which have signed mutual social insurance conventions with Israel can be found on the National Insurance Institute website, and includes details about the various types of insurance in each convention.
Kupat Holim (HMO)
The Right to Receive Health Services
According to the National Health Insurance Law, every resident is eligible to health services. According to this law, every resident is required to make health insurance payments and belong to an HMO. The HMOs receive funds from the State of Israel and are responsible for providing a certain basket of basic health services. Israeli residents staying abroad also have this right.
Loss of the Right to Receive Health Services
A person who is no longer an Israeli resident is not required to make health insurance payments, and loses the right to receive health services in Israel. In addition, Israeli residents abroad may lose their right to receive health services in Israel if they do not make health insurance payments. After 18 consecutive months of staying abroad, if insurance payments were not made for a period of at least 12 months, Israeli residents will lose their right to receive health services in Israel.
Redeeming the Right to Receive Health Services
Israeli residents abroad who have lost the right to receive health services in Israel and wish to redeem this right will have to return to Israel, start making health insurance payments, and undergo a waiting period. The length of the waiting period is determined by the length of time that the resident was abroad, where for each year abroad, one month of waiting is required. However, Israeli residents have the right to skip the waiting period by making a one-time payment of ILS 12,210, after which their right to receive health services in Israel will be renewed.
The right of Israeli residents to renew their eligibility to health insurance in Israel also depends on meeting the required criteria for residency – that is, moving their center of life back to Israel. This is the case of a returning resident, and more about the benefits given to returning residents can be found in another article on our website.
Military Reserve Service
Staying abroad does not give an automatic exemption from military reserve duty. However, you cannot be forced to take part in the reserve service while staying abroad. To avoid problems in this area, the reserve soldier should notify their reserve unit about their relocation and apply to be released from service, or to have their service period shortened or postponed. If, before purchasing a flight ticket abroad, the reserve soldier receives an order calling them to serve, they must take part in the reserve service.
Another important point to keep in mind is that, upon returning to Israel, if the reserve soldier is considered to be a returning resident and presents the relevant certificates for this, they will be exempt from reserve service for the first six months after returning to Israel.
Consular Rights
The Consular Department at the Israeli Ministry of Foreign Affairs provides consular services to Israelis staying abroad and manages the implementation of Israeli law abroad. The services are not completely uniform across states that have consulates, so it is advisable to check what consulate is relevant to the state in which you are and what services it provides. The consular services that are relevant to Israelis staying abroad usually include: passport services, issuance of certificates by the Ministry of Interior, authentication of public documents, validation and transfer of Police Clearance Certificates (PCC) / Good Conduct Certificates, warnings about travel to dangerous places, and help for Israelis in distress.
Plan Ahead
Of course, when travelling abroad as an Israeli resident, it is better to avoid surprises. Make sure that you fulfill all of your duties and exercise all of your rights as Israeli residents abroad. Find out what your status is at the Israeli income tax authorities, National Insurance Institute, and relevant HMO. Notify the reserve service about your relocation, if relevant. Of course, you should also check what consular services are available to you in your destination state.
Contact an Immigration Lawyer
If you are an Israeli resident staying abroad or are considering moving abroad, feel free to contact us. Our lawyers specialize in immigration and will be happy to advise you or represent you before the relevant authorities.
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:מאמרים מומלצים