On August 8, 2016, the Ministry of Finance together with the Israel Tax Authority (the "ITA"), published a draft of the Budget Bill for the years 2017-2018 (the “Draft Budget Bill”). Among its proposals, the Draft Budget Bill provided for the cancellation, as from January 1, 2017, of the ten-year-reporting exemption on foreign income and gains (the “Reporting Exemption”) available to New Immigrants and Long Absent Returning residents (the "New Immigrants").  The Draft Budget Bill did not cancel the exemption itself, but only the exemption from reporting.

The explanations for the cancellation of such reporting exemption, were allegedly due to the following: (1) constant failures on the part of the State of Israel with respect to OECD investigations; (2) difficulties in implementing exchange of information agreements with respect to New Immigrants, as well as companies controlled and managed by them; (3) difficulties in conducting effective tax audits for New Immigrants; and (4) risks associated with money laundering.

This attempt to cancel the Reporting Exemption to New Immigrants was once again rejected by the Government with the strong support of the Ministry of Aliya and Immigrant Absorption on August 15, 2016.  As a result, the final Budget Bill, which was published on August, 24 2016, does not include the provision eliminating the Reporting Exemption and accordingly for now, New Immigrants will continue to enjoy the exemption from reporting, at least in the near future.