Subsidy updates from July-August 2020
The Minister of Finance in Israel has decided that the amount of subsidies from July-August onwards will be awarded according to the year in which income was highest.
The self-employed and companies will therefore be able to choose between the years 2018 or 2019. Until now, subsidies have been based on 2018 only.
Following numerous cases brought to his attention, Finance Minister Israel Katz has decided that the amount of the subsidy of up to 15,000 shekels (every 2 months) will be determined on the basis of the highest taxable income between the balance sheets for the years 2018 and 2019, to enable those eligible to receive the highest amount.
Please note that if tax returns for 2018 & 2019 have already been submitted, the system will automatically calculate according to each year and award the highest grant directly.
However, if a self-employed person (ossek mourche or Ossek Patour) or shareholder in a company has submitted his tax return for 2018, but has not yet submitted his 2019 return, the following rule will apply:
- In a 1er The grant will be paid in 2018.
- If, once the 2019 tax return has been filed with the tax authorities, he finds that, according to the 2019 return, his taxable income is higher, the Israeli tax authorities will top up the difference.
Here's an example:
Mr Cohen is ossek mourche and has a taxable income in 2018 of 108,000 shekels per year. (9,000 shekels per month). He will be entitled to a subsidy of 9,000 * 70% = 6,300 shekels.
Once his 2019 return is returned to the tax authorities, Mr Cohen's taxable income is 140,000 shekels (11,667 shekels monthly). The subsidy should be 8,167 shekels (11,667 * 70%). As the amount of the grant is limited to 7,500 shekels, Mr Cohen will receive the balance between 6,300 shekels and 7,500 shekels.
Having already received 6,300 shekels, the Israeli tax authorities will pay Mr Cohen a further 1,200 shekels a month.
Please note that this provision applies from the subsidy that will be granted to self-employed people and business owners from July 2021.
This provision is not retroactive to previous grants.