The Israeli government is gradually getting its act together in providing financial support for people and businesses. Here is a brief update as of Tuesday. It is not complete as the measures are still evolving.
Evacuees:
Relocation grants are to be paid automatically by the National Insurance Institute (NII) into the bank accounts of evacuees not in subsidized accommodation, according to an announcement the NII published last week. Payments may range up to NIS 100 per day per child and NIS 200 per day per adult. The evacuees must file an online declaration to start the process (https://www.gov.il/he/service/yachad).
Business support:
Last week, the government announced a financial support package for businesses indirectly impacted by the 2023 Israel-Hamas war. The announcement updated earlier proposals but is subject to Knesset approval, which is expected “in the next few days.” The proposed program would apply to businesses with annual revenue between NIS 18,000 and NIS 400,000 that suffer a 12.5% drop in monthly revenues, or 25% for bimonthly revenues, in the October-November period as applicable. Most small and medium-sized businesses with annual revenues below NIS 1,615,000 are bimonthly VAT filers.
The package contains a number of sliding scales based on revenue decline and payroll. If revenues are between NIS 300,000 and NIS 400 million, government grants may range from 7% to 22% of the drop in revenues plus 75% of payroll multiplied by the % drop in revenue. This would be subject to monetary caps of NIS 300,000 to NIS 1.2m., depending on size of revenues. Once the online system is opened up, businesses will have 90 days to file compensation claims. According to reports, the 22% may be increased in exceptional cases to 33%.
Expedited down-payment grants of up to NIS 500,000 may be available for frontline southern and northern businesses. Evacuated individuals can claim getting-organized grants of NIS 1,000 each, or NIS 5,000 per family.
The Israel Innovation Authority has an expedited R&D grant facility for hi-tech of up to NIS 7.5m., called “Runway,” (https://innovationisrael.org.il/route/fasttrack/#about_route).
Regarding layoffs and unemployment pay, the minimum period has been reduced from 30 to 14 days, and vacation time may need not be offset for the October 7-November 30 period.
Reservist salary reimbursement:
Employers of smaller businesses with up to 10 employees called up to the IDF reserves may request expedited reimbursement of their salaries from the NII (https://www.btl.gov.il/about/news/Pages/MarctMkovnet.aspx). There is no need to provide details of how long they were called up for, nor must they provide the usual IDF confirmation.
Company cars:
Last week, the Israel Tax Authority said employees with a company car who are called up to the IDF reserves or laid off may notify their employer that the vehicle is back “at the employer’s disposal” and stop paying tax on car-usage fringe benefits from that date, “even if it is left in the field” (i.e., not at the employer’s premises). Moreover, the employee or someone on their behalf may make that notification retroactively up to seven days after the reserve duty ends.
Deadlines:
The Law for Postponing Deadlines (Ad Hoc Swords of Iron) was enacted on October 18. It applies to soldiers, hostages, people who were missing, evacuees, the estate of persons who died, hospitalized people, police personnel, prison personnel, fire personnel, full-time volunteers, spouses of the aforementioned, and companies owned by five or fewer people directly or via a parent company.
The law suspends a range of contractual, governmental, court, payment, and tax deadlines. The law does not apply to alimony or salary deadlines. Initially, the stated delay period is October 7-November 7, but it is likely to be extended by the government if approved by the Knesset Foreign Affairs and Defense Committee. Note that various exceptions and conditions apply.
Other measures:
E-invoicing adoption is postponed by three months to March 31, 2024.
People wishing to arrange imports of protective and other equipment for soldiers should contact the Defense Ministry (trumot_migun@mod.gov.il).
Soldiers returning from abroad to volunteer for the IDF may receive minimal NII support. If they do not have an Israeli identity card, that must be arranged first.
Injured people and/or their families may apply to the NII, depending on various things.
The Bank of Israel has issued guidance regarding a three-month postponement of loan repayments for businesses and households.
Customs is reportedly leaving transportation costs out of the value of imports for customs and import taxes.
As always, consult experienced professional advisers in each country at an early stage in specific cases.
leon@hcat.co
The writer is a certified public accountant and tax specialist at Harris Consulting & Tax Ltd.