Tax Authority document reveals: jump in the number of wealthy people leaving Israel
A new study by the Tax Authority indicates a sharp change in the profile of Israelis moving abroad: the rate of departures from the top decile has risen by about 80%, and the number of those leaving the high-tech and healthcare sectors has more than doubled. The taxes paid by those leaving before their departure reached about 1.2 billion shekels per year. Simultaneously, the number of people reporting the removal of more than half a million shekels from Israel has quadrupled among emigrants.
Not only has the number of Israelis leaving the country increased in recent years, but their economic profile has also changed: more high-income earners, employees in high-tech and the healthcare system, and people at the peak of their careers are moving abroad. This is according to a new study by the Planning and Economics Division of the Tax Authority, which examined the incomes and tax payments of Israelis who emigrated between 2015 and 2024.
According to the study, the number of departures has grown by about 50% compared to the years before the coronavirus pandemic, but the taxes they paid in the year preceding their departure have jumped at a much sharper rate. Until 2019, the income tax paid by those leaving amounted to about half a billion shekels per year, whereas in 2023 and 2024, the amount reached about 1.2 billion shekels each year.
The Tax Authority defines this as a potential tax loss of about 700 million shekels for each new annual cohort of departures. However, this does not necessarily mean an immediate or full loss of revenue: some of those leaving may continue to be considered Israeli residents for tax purposes, and some continue to pay taxes in Israel even after their departure. The determination of residency is done on an individual basis and usually only in retrospect.
The authors of the study, Dr. Ariel Greizes and Nili Ben Tovim, note that it is difficult to determine what is behind the change. According to them, it may be related to changes in the labor market and society following the coronavirus, but it is possible that it is also a reaction to the political and security events since the beginning of 2023.
The potential for damage to state tax revenues is growing
Data show that the growth in emigration is not distributed equally among population strata. The rate of departures from the top decile has risen from about 0.3% per year in the past to more than 0.5% in 2024, meaning a jump of about 80%. In the lower deciles, by contrast, the rate of departures has remained stable over the decade.
The top decile is currently responsible for about 67% of all income of those leaving and for about 86% of the income tax they paid before their departure. Therefore, the change in the composition of those leaving explains why the potential damage to state tax revenues has grown much more than the number of migrants itself.
The average income of those leaving has also risen sharply. In 2015-2019, their average annual income in the year before departure stood at about 125 thousand shekels. In 2024, it reached about 200 thousand shekels, a real increase of about 60%. While in the past the income of those leaving was similar to the average income in the economy, today it is about 50% higher.
Demographic and professional shifts
The change is also prominent in the age distribution. Among those aged 20-30, the rate of departures has remained stable for a decade, around 1% per year. In contrast, among those aged 40-50, it has risen from about 0.4% to about 0.7% in 2024, a jump of about 60%. The share of this group among those leaving over the age of 20 has grown from 13% about a decade ago to about 20% today.
This is an age group that is usually at the peak of its career and income. Accordingly, the total income of those aged 40-50 before their departure has tripled from about 900 million shekels per year to about 2.7 billion shekels. The taxes paid by members of this group before departure have grown by about 165%.
Employment sectors also point to a growing departure of high-wage workers. The number of those leaving who worked in high-tech has grown by about 150%, and the number of those leaving the healthcare sector has grown by more than 100%. In sectors where wages are lower, including education and industry, no significant change has been recorded.
Four times as many departures reported taking out more than half a million shekels
Alongside the emigration data, the study points to a significant increase in the number of Israelis reporting to the Tax Authority that they have taken more than half a million shekels out of the country. In 2023-2024, the number of those reporting this in the general population doubled, while among those who left the country, a fourfold jump was recorded.
The authors of the study raise the possibility that the trend reflects a shift by some Israelis to a risk diversification strategy, by holding a larger portion of their assets outside of Israel. They emphasize that this still involves only a few hundred reporters, but believe that in view of the sharp rise in their number, the phenomenon should continue to be monitored.
For the purpose of the study, departures were defined as citizens who stayed outside of Israel for at least 90 consecutive days in the year of departure and more than 270 days in the following year. To neutralize temporary departures, only those who lived in Israel for at least three years before their departure were included in the analysis.
