ByLEON HARRIS

MAY 15, 2026 20:54

The Knesset recently approved the Economic Assistance Plan Law, delivering government support to businesses hit by Operation Roaring Lion. Within hours the Israel Tax Authority launched a preliminary online portal for filing claims tied to conflict-related losses. The full platform is slated to launch this coming Sunday.

The legislation presents complexities, typically requiring accountants to input figures into the Israel Tax Authority's online platform, which then performs the necessary computations.

Summary of the New Economic Assistance Plan Law

Key elements of the updated compensation framework: The statute revises the Property Tax and Compensation Fund Law through the close of 2031. Hopefully the conflict concludes well before that date.

Payments generally cover the qualifying windows of March-April 2026 or May-June 2026 for qualifying cash-basis enterprises such as professionals.

Support targets entities whose operations suffer indirect effects from war damage or restricted asset access. Separate provisions address direct property destruction.

The reference year is normally calendar 2025. New enterprises instead use the period from registration through February 28, 2026.

Businesses on the front lines that were evacuated after the October 7, 2023 attacks generally reference the period beginning September 1, 2022. Startups launched between January 1, 2023 and February 28, 2026 normally use July 1, 2025 to February 28, 2026 as their base interval.

Larger enterprises: Affected firms registered for tax purposes by late February 2026 and reporting base-year sales between NIS 300,000 and NIS 400 million may qualify for expense reimbursement when sales decline exceeds 25 percent in the qualifying window.

Two categories of qualifying costs exist: fixed overhead and payroll. Distinct caps and conditions govern each category. The apparent monthly minimum for these firms stands at NIS 4,980.

Fixed overhead: Prior-year VAT input expenses (prorated for shorter base periods) multiplied by a sales-reduction factor of up to 22 percent and then doubled for the two-month qualifying span. Reduction bands translate to factors of 7 percent (25-40 percent drop), 11 percent (40-60 percent), 15 percent (60-80 percent), and 22 percent (over 80 percent).

Payroll costs: Either 75 percent of qualifying-period wages multiplied by 1.25, or the March 2026 national average monthly salary times the count of qualifying employees times 1.25, reduced by any National Insurance Institute reserve-duty reimbursements. A qualifying employee must remain employed throughout the period.

Smaller enterprises: Firms with base-year sales of NIS 12,000 to NIS 300,000 may receive monthly stipends ranging from NIS 1,864 to NIS 14,940, scaled by sales level and reduction percentage, then doubled for the two-month window.

Exclusions cover public bodies, kibbutzim, partnerships, select builders and landowners, wholesalers, retailers, financial entities, precious-stone traders, and additional categories.

Overall caps apply, doubled for the two-month period. Firms with base sales up to NIS 100 million face a NIS 600,000 ceiling. Sales between NIS 100 million and NIS 300 million add 0.3 percent of the excess over NIS 100 million. Sales from NIS 300 million to NIS 400 million carry a NIS 1.2 million limit.

Procedures: The new online claims portal opens May 17. The ITA must respond within eight months and settle any balance within 14 days. Queries from the authority pause these deadlines. Four years remain available to amend filings.

Enterprises previously compensated for June 2025, October 2023, or November-December 2023 may request an immediate advance of up to 80 percent of that prior sum. Others may seek 80 percent multiplied by 7 percent (5.6 percent) of average 2025 monthly expenses. Separate, less defined rules and timelines govern exempt dealers (annual sales up to NIS 122,833 in 2026); further guidance is pending.

Alternatively, the ITA will issue a 60 percent advance within 21 days of filing and an additional 10 percent after 150 days.

Best regards.

Consult seasoned tax professionals in each jurisdiction promptly for case-specific advice.

leon@hcat.co

The author is a certified public accountant and tax specialist at Harris Consulting and Tax Ltd.