Business Compensation: How to Claim Payments for Indirect War Damage

Core Concept

The state provides financial compensation to businesses whose turnover has declined due to war or a security-related state of emergency. This assistance is intended to cover indirect damages—that is, loss of income, rather than direct physical damage to property. The objective is to help businesses stay afloat during a difficult period.

Who is Eligible?

Eligibility for compensation is typically determined by the government for each specific conflict and depends on several factors. As a rule, the following may be eligible for payments:

• Businesses located in localities that have been officially designated as affected (the list is published officially).
• Entrepreneurs (osek murshe / osek patur) and companies (hevra ba'am) whose turnover has significantly decreased compared to the same period in the past.
• Businesses whose operations were disrupted due to restrictions imposed by the Home Front Command (Pikud ha-Oref).

Who is generally NOT eligible:

• Businesses located outside the approved geographical zone.
• Businesses that have sustained direct damage (e.g., a rocket strike)—a separate compensation mechanism exists for direct damages.
• New businesses that do not have a base period for turnover comparison.

Your Rights

The amount of compensation is not fixed and is calculated on an individual basis. Several calculation models may be applied:

• Turnover Track: Compensation is calculated as a percentage of the decline in turnover compared to a base period.
• Expenses Track: Compensation covers a portion of the business's fixed expenses (salaries, rent).
• Agricultural Track: Special provisions for agricultural businesses, taking into account the specifics of their operations.

The calculation methodology and maximum amounts are published by the Tax Authority (Rashut ha-Misim) at the beginning of the application period.

Step-by-Step Guide

1. Await the official announcement. The government and the Tax Authority must officially announce the start of the compensation program and publish the exact criteria.
2. Log in to your personal account. The application is submitted online through a dedicated system on the Tax Authority's website. You will need your user code and password.
3. Select the appropriate track. The system will offer a choice of compensation models (turnover, expenses, etc.). Choose the one that is most advantageous for your business.
4. Complete the declaration. Enter data on income and expenses for the reporting and base periods. The system often pulls data from VAT (MAAM) reports automatically.
5. Submit the claim (Tvia). Review all the data and submit the form. Save the confirmation number (ishur kabbala).
6. Await the decision and payment. The Tax Authority reviews the application. If approved, the funds will be transferred directly to the bank account registered to your business. Expected time: from several days to several weeks.

List of Documents

Although most data is populated automatically, be prepared to provide supporting documents in the event of an audit:

• Profit and loss statements for the reporting and base periods.
• VAT reports (דו"חות מע"מ) for the relevant months.
• Bank statements confirming turnover.
• Documents confirming fixed expenses (lease agreements, payroll records).
• Confirmation of business bank details (chek bitachon / ishur niul heshbon).

Pitfalls

• Application Deadlines. This is the most critical point. The window for submitting applications is usually very short (a few weeks). If you miss the deadline, it will be impossible to submit an application.
• Choosing the Correct Track. An incorrectly chosen calculation model can significantly reduce the compensation amount. Consult with your accountant (ro'e heshbon) before submitting.
• "Green" and "Red" Paths. There is often a simplified ("green") path for a quick advance payment, but it may be less than the full amount. A full ("red") application requires more data but may result in greater compensation.
• Data Accuracy. Any discrepancy between the submitted declaration and your accounting records can lead to delays, audits, and penalties.

Contacts and Links

Official information, including criteria, deadlines, and links to the online application system, is published exclusively on official resources.

• Primary Source: The Israel Tax Authority (Rashut ha-Misim) website. Regularly check the site's homepage during a state of emergency.
• Tax Authority Call Center: Check the official website for the current phone number.

ATTENTION: Do not use unofficial links or the services of intermediaries who promise to "help" for a percentage. The application is free of charge and is submitted only through the official government system.

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