Tax and reporting: what to ask your accountant
This is the page where we do not answer. Tax is the area where a wrong answer costs more than anything else on this site, and we are not accountants. What is here instead: what the treaty says, and the list of questions to bring to the meeting.
Written by Gilad HuberUpdated To be re-checked by
Why there are no numbers here
Tax rates change. Reporting thresholds are updated annually. Elective regimes open and close. A marketing page that quotes a tax rate will be wrong before long – and in the meantime someone will rely on it while deciding on a transaction worth several hundred thousand shekels.
We tried to verify thresholds and rates against a primary publication of the Israel Tax Authority, and could not do so to the standard this page demands. So they are not here. We would rather publish a page that says less and stays true.
What is durable is the structure: what the treaty allocates between the two countries, and which questions you need to ask. Neither of those goes stale every January.
What the treaty actually says
A convention for the avoidance of double taxation exists between Israel and the UAE, and its full Hebrew text is published on the Israeli government's site. Three of its articles bear directly on someone buying property.
Article 6 provides that income derived by a resident of one contracting state from immovable property situated in the other may be taxed in that other state. Article 13 provides the same for gains from the alienation of that immovable property.
Article 23 sets out how double taxation is eliminated in Israel's case: where an Israeli resident derives income that may be taxed in the UAE, Israel allows a deduction from the tax on that resident's income equal to the tax paid there – but the deduction may not exceed the part of Israeli income tax attributable to that income.1
Two further details worth knowing. Article 2 lists the Israeli taxes the treaty applies to – income tax and companies tax, including tax on capital gains, and the tax on gains from the transfer of property under the Real Estate Taxation Law. And Article 29 provides that the treaty enters into force on the later of the two states' mutual notifications, its provisions applying to taxes for periods beginning on 1 January of the calendar year following the year of entry into force.
We have not verified the precise effective date against a primary publication, so it does not appear here. It is one of the questions on the list below.1
Questions about rental income
- Which tax regimes are available to me on rental income from a foreign property, and how do they differ on deductible expenses, depreciation and credit for foreign tax?
- Does electing a regime bind me for future years, or can I re-elect annually?
- If no tax was paid in the UAE on this income, what exactly am I crediting under Article 23 of the treaty?
- Is this income subject to national insurance or health contributions?
- What counts as a deductible expense: service charges, property management, furnishing, currency conversion, transfer fees?
- How is the exchange rate treated – at the date income is received, on an annual average, or otherwise?
Questions about selling
- When I sell, under which part of the Ordinance is the gain taxed, and what counts as the acquisition cost: the contract price, or also the DLD fee and the purchase costs?
- How is a gain arising purely from the change in exchange rate between purchase and sale treated?
- Do payments made over years under a payment plan change how the gain is computed?
- Is selling the right before handover – that is, assigning the contract rather than the property – treated differently?
- Which documents from the UAE will I need to evidence the gain and the tax paid there, and should I be keeping them from day one?
Questions about reporting
- Does merely holding a foreign property require me to file an annual return, even before it produces income?
- Does transferring the funds abroad itself create a reporting obligation, and from what amount?
- What is the relevant threshold this year, and from which official source is it taken?
- From exactly which tax year does the UAE treaty apply, and what does that mean for earlier years?
- If I am buying off-plan with handover in three years, when precisely do reporting obligations begin?
- Is it better to hold the property personally or through another structure, and what follows from each?
What this page does not do
- It is not tax advice and cannot be. It describes the text of the treaty and proposes questions.
- It quotes no tax rates, reporting thresholds or treaty effective date – none of these were verified against a primary source.
- It does not address personal circumstances: residency, new-immigrant or returning-resident status, joint ownership, financing. Each of those changes the picture.
- It does not replace the transaction documents themselves, which govern.
- It is accurate as at the review date at the top of the page.
Common questions
- There is a treaty between Israel and the UAE – so I do not pay Israeli tax?
- That is not what the treaty says. Articles 6 and 13 provide that income and gains from immovable property in the UAE may be taxed there – not that they are taxed only there. Article 23 expressly sets out how Israel gives credit for tax paid in the UAE, capped at the Israeli tax attributable to that income. The existence of that credit mechanism presupposes that Israel taxes its residents on this income.
- When should I speak to an accountant – before the purchase or after?
- Before. Some of the questions on the list, above all how the property is held, are very hard to correct once the unit has been registered in a particular name in Dubai's register – such a change is a transaction in its own right, with fees and possibly with tax consequences.
- Why is there no table of tax rates on this site?
- Because we could not verify rates and thresholds against a primary publication of the Israel Tax Authority to the standard this page demands, and a wrong figure here is worse than none. The rate relevant to you also depends on personal circumstances we do not know.
Sources
Every link here is to a publication of the issuing body itself. If something on this page looks wrong to you, the source governs – not us.
- The Israel-UAE convention for the avoidance of double taxation – full Hebrew text
gov.il – Government of IsraelChecked 8 August 2026
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