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How do I close my Israeli tax and National Insurance files when I leave Israel permanently?

Nothing closes on its own. An open income tax file keeps generating assessment activity and an open Bituach Leumi file keeps accruing monthly contributions long after you have gone. Closing them takes three separate steps: a final annual return to the assessing officer with a written request to close the file, deregistration for VAT if you were self-employed, and a residency determination from the National Insurance Institute. Section 100A of the Income Tax Ordinance also treats emigration as a deemed sale of your assets, so that position must be settled at the same time.

The Israel Tax Authority does not accept a departure notice at face value. Residency turns on the center of life test in Section 1 of the Income Tax Ordinance [New Version] 5721-1961, which weighs family, home, habitual residence, and economic interests alongside day counts. The assessing officer will look for evidence that the center of life actually moved: a foreign lease or purchase, school registration for children, a foreign employment contract, and the sale or long-term letting of the Israeli home. A file closed on paper without that evidence can be reopened. The deemed disposal under Section 100A runs on the same date, and deferral must be elected rather than assumed.

The National Insurance Institute runs a separate test and a separate file, which is where most emigrants get caught. Until it accepts that residency ended, it charges minimum health and insurance contributions every month, and those build into a debt that surfaces years later when the person applies for a passport renewal or returns to Israel. Submit the residency questionnaire with the same evidence pack used for the tax file, and keep a bank account open until the final assessment issues so refunds and balancing payments can settle. A non-resident with continuing Israeli-source income, such as rent, keeps a reporting obligation regardless.

⚖ In Practice
  • Governing law: Income Tax Ordinance [New Version] 5721-1961 (residency in Section 1; deemed sale on emigration under Section 100A); National Insurance Law [Consolidated Version] 5755-1995; Value Added Tax Law 5736-1975
  • Competent authorities: Israel Tax Authority assessing office (Pekid Shuma), the VAT office (Ma'am), and the National Insurance Institute (Bituach Leumi)
  • Filings: annual return Form 1301 for the departure year, a written request to close the tax file, a VAT closure request for an osek, and the National Insurance residency questionnaire for a person leaving Israel
  • Cost of doing nothing: minimum Bituach Leumi contributions of roughly NIS 200 per month (2026) continue to accrue as a debt, with linkage and interest added
  • Timeline: 6 to 24 months from the final return to written confirmation that the tax file is closed; National Insurance residency decisions commonly take 3 to 6 months

From the full guide: Leaving Israel: Your Tax and Financial Checklist for Foreign Workers and Expats

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Get a Free Consultation with Adv. Eli ShimonyPrepared under the direction of Adv. Eli Shimony, Eli Shimony Law Office · Editorial policy

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