Israel annual tax return (doch shnati): who has to file, Form 1301, the 2026 deadlines and the penalties

Who has to file an annual return

The Ordinance starts from the principle that every resident reports their income; a regulation then exempts most employees, whose tax is withheld at source. You lose that exemption as soon as one of the situations below applies. The thresholds are those of tax year 2025 (filed in 2026) and are indexed every year.

Two cases catch people out. A foreign broker (Interactive Brokers, a brokerage account left in the US or the UK) does not withhold Israeli tax: any realised gain creates a filing obligation, however small. And the sale of an exempt main residence is not reported on the annual return but to the Real Estate Tax Authority (misui mekarkein).

Filing when you don't have to: when it pays

An employee who is not required to file can do so voluntarily, and it often pays: a job change during the year, months without salary, unused credit points (children, degree, aliyah), donations to approved charities, personal pension contributions. The simplest route is then Form 135, a simplified return designed for that case and claimable six years back, covered in the tax refund guide. Be aware that a voluntary return is still a return: if it shows tax due (two uncoordinated employers, undeclared income), the Tax Authority issues a payment demand.

Form 1301 and its annexes

Form 1301 is the return for individuals and sole traders; companies file Form 1214. The 1301 sums up all the household's income (the spouse is included), credits and deductions, and works out the tax due or the refund. The annexes depend on your situation:

A company files its own return, and its controlling shareholder files one too: one of the costs to factor in when choosing between self-employed status and a company.

Deadlines: tax year 2025, filed in 2026

The statutory date is 30 April, but the Tax Authority postpones it almost every year. For tax year 2025, citing the security situation, it set:

The staggered schedule only applies to files already held by a registered representative: an individual filing alone stays on the May or June dates. And postponing the return does not postpone the tax: any balance due carries interest and indexation from the end of the tax year.

Documents to gather

• Form 106 from each employer: salary, tax withheld and pension contributions for the year.
• Form 867 from each Israeli bank and broker: interest, dividends, capital gains and tax withheld at source.
• Foreign annual statements: bank accounts, brokers (tax statement, list of sales with dates and cost basis), rent, pensions, with the foreign tax paid, for Annex D.
• Self-employed records: turnover, invoices, expenses, depreciation, advance payments to the Tax Authority and to Bituach Leumi.
• Credit evidence: section 46 donation receipts, statements of personal pension and life insurance payments, teudat oleh, discharge certificate, degree (Form 119), residence certificate for a qualifying town (Form 1312A).
• Bituach Leumi statements for benefits received (unemployment, maternity, reserve duty).

Filing online, step by step

1. Set up access to your personal area on the Tax Authority website (government identification, with your teudat zehut and phone).
2. Open the year's Form 1301: part of the data is prefilled from the 106 and 867 forms sent by employers and banks. Check it; it is sometimes incomplete.
3. Add the income that isn't prefilled: self-employment, rent, foreign income, gains through a foreign broker, with the matching annexes.
4. Claim your credits: points (children, olim, degree), donations, personal pension and life insurance payments.
5. Attach scanned evidence and keep the originals: the Tax Authority can ask for them for several years.
6. Submit and pay any balance. You then receive an assessment (shuma): a refund with interest, tax to pay, or zero. The Tax Authority can still audit the return within the statutory period.

Late or missing returns: what you risk

• Late-filing fine (section 188 of the Ordinance): a fixed amount per month of delay, in the order of a few hundred shekels a month, indexed every year.
• Paper-filing fine when online filing was mandatory: also monthly, and on top of the first one.
• Interest and indexation on any unpaid tax, from the end of the tax year.
• Best-judgement assessment: without a return, the Tax Authority sets your taxable income itself, and it is up to you to challenge it.
• Criminal exposure: failing to file when required is an offence, punishable by a fine or, in serious cases, imprisonment.

If a return was missed, filing it voluntarily, before any letter from the Tax Authority, is by far the best option; for foreign income left unreported for several years, the voluntary disclosure route is best prepared with a professional.

Olim and returning residents: what changed in 2026

Until the end of 2025, an oleh was both exempt from tax on foreign income for ten years and exempt from reporting it. Amendment 272 removed the reporting exemption for people who became resident on or after 1 January 2026: they report their foreign income and assets every year, which stay exempt. The first return concerned is for tax year 2026, filed in 2027. Olim who arrived before 2026 keep the old regime, but, like any resident, must report Israeli income that crosses a threshold. The exemption, the points and the adaptation year are covered in the oleh tax benefits guide.

And the US or the UK?

The Israeli return does not replace your home-country filing:

• United States: a US citizen files a US return every year wherever they live (Form 1040, plus FBAR for Israeli accounts), in addition to the Israeli return. The two are coordinated through the foreign tax credit and the treaty, covered in the US–Israel tax treaty guide.
• United Kingdom: a leaver files a UK return for the year of departure (split-year treatment may apply), then only for UK-source income such as rent, under the UK–Israel treaty rules.
• France: while you remain French tax resident, you report worldwide income in France and Form 3916 for your Israeli accounts; our French-language guide to the France–Israel tax treaty covers the rest.

What changes in 2027

• First amendment 272 returns: olim and returning residents who arrived in 2026 file their first return including foreign income and assets in 2027.
• Frozen brackets: indexation of brackets and credit points is frozen for 2025, 2026 and 2027; the filing thresholds themselves are revised every year and will be published for tax year 2026 in early 2027.
• Calendar: the deadlines for tax year 2026 will be set in the first quarter of 2027; the statutory date remains 30 April, and any postponement is the Tax Authority's decision.

This page will be updated as soon as the official thresholds and deadlines are published.

Six common mistakes

1. Assuming employees never file, when a brokerage account abroad or one rental is enough to create the duty.
2. Forgetting gains at a foreign broker, which does not withhold Israeli tax.
3. Mixing up the annual return and a refund claim: Form 135 is only for employees not required to file.
4. Relying on the accountants' calendar while filing alone: it only applies to represented files.
5. Paying late on the assumption that a postponed return postpones the tax: interest runs from the end of the year.
6. Neglecting the home-country return, starting with the US one, which never stops for citizens.