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Israel — Acquisition of Citizenship, Two Types of Passports, and Tax Implications

26 September 2017

Eli Gervits, Eli Gervits — Law Offices, Israel

The Israeli nationality is some-what unique when compared to other nationalities, distinguishing between different categories of citizens. Two documents are issued in this respect by the State of Israel: an ordinary passport and the Israeli Laissez-passer. The latter is issued in exceptional circumstances, including to:

  •  Israeli citizens who have lived abroad for more than 10 years
  •  Citizens who have just acquired Israeli citizenship status by virtue of the Law of Return
  •  Israeli citizens who have lost or destroyed two or more passports within a period of 10 years

Israeli citizenship can be acquired by birth, by way of the Law of Return, through residence, or through naturalization. Israeli citizenship is granted by birth to children whose mother or father are Israeli citizens regardless of whether the child was born in or outside of Israel. Furthermore, people born in Israel who have never had any nationality are entitled to apply for citizenship (subject to limitations specified in Israel’s Nationality Law), if they do so between their 18th and 21st birthdays and have been residing in Israel for five consecutive years immediately before their application.

The overwhelming majority of Israeli citizens who do not acquire citizenship by birth receive it under the provisions of the Law of Return of 1950. Paying tribute to the history of persecution, the founders of the State of Israel proclaimed on its establishment the renewal of the Jewish State in the Land of Israel, ‘which would open the gates of the homeland wide to every Jew’. The Law of Return grants every oleh (a Jew immigrating to Israel) the right to become a citizen. Israel’s Supreme Court proclaimed this law to be ‘one of the most basic laws of the State’, and the right of every Jew to make aliyah one of the core characteristics which forge the minimum definition of the State of Israel as a Jewish State. The Law of Return endows Jews, their children and grand-children, and their respective spouses, with the right to Israeli citizenship. Jewishness is inherited through the female side of the family; therefore, a Jew is a person born to a Jewish mother. The Law of Return regulates neither method nor depth of the evidence to prove the existence of Jewish roots and leaves this decision to the discretion of officials. However, an applicant’s Jewishness (or that of his/her ancestors) must be supported by documents.

There is no exhaustive list of necessary or sufficient proof. However, the following examples can serve as such, provided they contain the required information about an applicant’s Jewishness: birth certificates, passports, military cards, and employment or study records, even tenancy agreements. The Law of Return was extended in 1970 to include the children and grandchildren of a Jewish person, the spouse of the child of a Jew as well as the spouse of the grandchild of a Jew. There are exemptions from the Law of Return, however, for people who were previously Jewish and voluntarily changed their religion. Further exclusions exist for people who are likely to pose a danger to public welfare and state security.

Another interesting feature about individuals applying for Israeli citizenship by using their ‘Jewish roots’ is the fact that citizenship can be received upon arrival without the prerequisite of a period of residence. This can lead to someone obtaining the status of citizen prior to being a resident. Furthermore, it is worth noting that, unlike the following categories, those who obtained their nationality through the Law of Return are entitled to dual nationality and may retain their previous passport.

Obtaining an Israeli passport through residence is possible exclusively for Palestinian citizens of the former British Mandatory Palestine. Those who remained in Israel from 1948 (when the State of Israel was established) until 1952 (when the Nationality Law was enacted) became Israeli citizens through residence, provided they were registered inhabitants on 1 March 1952 and were living in or entered the country or future Israeli territory on the day the Nationality Law entered into force (section 3a of the Nationality Law). Those born after the establishment of the State and who resided in Israel on the entry into force of the Nationality Law, and whose mother or father became an Israeli national under the above naturalization provision, became a national on the day of their birth (section 3b of the Nationality Law). This law was amended in 1980 to include further possibilities for the acquisition of citizenship via residence, extending citizenship to the Arab offspring of former Palestinian citizens who did not remain in Israel in the period between the establishment of the State of Israel and the enactment of the Nationality Law, but who returned to Israel and were previously entitled to permanent resident status.

While the previously described three ways to acquire Israeli citizenship require applicants to possess specific characteristics (being born to an Israeli parent, having close Jewish relations, or having been a resident of the former British Mandatory Palestine), naturalization seems to be the most general way of obtaining an Israeli passport. Naturalization is open to adults, though at the discretion of the minister of the interior and subject to the following requirements: applicants must have resided in Israel for three years out of  the five years immediately preceding their application; they must be entitled to reside in Israel permanently and have settled or intend to settle in Israel; and they need to renounce their prior nationality, or have proven that they will cease to be foreign nationals upon becoming Israeli nationals (section 5 of the Nationality Law).

Interestingly, Israel appears to be the only country in the world to provide two different types of travel documents to its citizens without distinguishing between different classes of citizenship, but depending solely on their residence status. Israeli natives and new repatriates who have been living in Israel permanently for a long period hold the international passport (in English ‘passport’, in Hebrew darkons), while people who only recently received their Israeli citizenship or who do not constantly live in Israel are granted an international ‘provisional passport’ (mistakenly named ‘Laissez-passer’).

One very attractive aspect of a newly acquired Israeli citizenship is the 10-year tax exemption for most income generated abroad. Taxation in Israel is personal, and Israeli tax residents must pay taxes in Israel on their income generated anywhere in the world. However, new Israeli citizens are exempt from this rule for a period of 10 years in respect of their global, non-Israeli income and their obligations to pay taxes.