Israel Tax Agency Issues Posts Circular Clarifying Specified Employee Stock Options Exercised After Becoming Resident

The Israeli Tax Authority Nov. 11 posted Income Tax Circular No. 9/2025, clarifying the individual income taxation of employee stock options received by a nonresident individual from a nonresident employer, and exercised after the individual becomes an Israeli resident. Topics covered include: 1) the postponement of the date of the tax event to the earlier of the date of converting the option into a share or of selling the options, with exceptions, and the classification of the income from exercising the option as employment income; 2) the treatment of restricted stock units (RSUs) as equivalent to stock options for purposes ...