Client updates

In March 2026, the Ministry of Economy and Industry published a draft bill to replace the current dual-use export control orders with comprehensive primary legislation. The proposed law aims to broaden regulatory oversight and establish a more effective, modern framework for controlling exports of civilian, nuclear, biological, and chemical items.

The Israeli Privacy Protection Authority (PPA) has published a position paper clarifying its interpretation of Regulation 2(4) regarding the transfer of personal data abroad. In this context, it emphasizes the requirements applicable to organizations transferring data outside of Israel, including to the United States.

Israel’s Supreme Court is stepping up its efforts to address AI-generated hallucinations, and recently ordered the Ramat Gan Municipality to pay exceptional court expenses of ILS 30,000. This is due to the municipality’s reliance on fictitious case law and a non-existent Ministry of Education Director-General circular, in a way that violated a special education child’s right to transportation to his school.

In light of the declaration of a state of emergency on the home front following Operation Epic Fury, the Registrar of Associations and Endowments clarified that NPOs and public benefit companies (PBCs) may continue operating under the lenient directive dated October 10, 2023. This allows them to carry out activities aimed at providing immediate and essential assistance during the state of emergency, even if such activities do not fully align with their approved objectives.

On March 3, 2026, the Minister of Labor announced his intention to issue an extension order of a collective bargaining agreement to regulate the rights of reservists and their spouses. For convenience, the key provisions of the collective bargaining agreement are set out below. We will update when this extension order is announced.

In the wake of October 7, 2023, the Israel Land Authority issued a temporary order increasing the quota for solar fields allocated to kibbutzim in the Tkuma region adjacent to the Gaza Strip. Relying on this temporary order, several communities invested significant resources in advancing solar field projects.

In November 2025, the OECD published an update to the interpretation of the OECD Model Tax Convention to address contemporary business practices in today’s environment. The update addresses, inter alia, how permanent establishment rules should be interpreted in the context of remote work and work performed from another country.

Labor law does not go on unpaid leave, even during wartime. This update outlines several changes in the Home Front Command’s defense guidelines relating to employees returning to workplaces and the extension of permits enabling employers to require employees to work exceptional overtime hours. There is also an important update regarding an increase in the minimum wage.

In its final position statement, the PPA presents a stricter interpretation of the law that more closely aligns with the approach used in European law (the GDPR), under which data subjects must issue active, free, and informed consent. At the same time, the PPA limits the possibilities of relying on the concept of “tacit consent” found in the law.

On March 1, 2026, following the launch of Operation Rising Lion, Israel’s Ministry of Interior published a series of regulatory reliefs and emergency guidelines for local authorities to strengthen municipal resilience and facilitate functional continuity and the provision of solutions to residents in times of emergency.

The draft National Cybersecurity Law was published in January 2026. This significant regulatory measure is likely to have broad implications for organizations across the economy, especially digital service providers and entities that provide technological infrastructure.

If you participated in Mehir LaMishtaken tenders and paid purchase tax, we recommend promptly reviewing whether you may be eligible for a purchase tax refund. We are at your service to perform a preliminary eligibility review based on the tender documents, lease contract, special conditions appendix, and construction contract.

The Banking Supervision Department has published for public comment a draft Proper Conduct of Banking Business Directive titled “Supervisory Framework for Small and New Banks.” The purpose of the draft directive is to adapt regulatory and supervisory requirements to the size and complexity of small and new banking corporations’ operations, in accordance with the Basel Committee’s principle of proportionality, while maintaining banking system stability and protecting customers.

A settlement was approved recently within the framework of two class actions, which may result in some taxpayers receiving considerable financial refunds, while specifically re-examining the taxation of additional development expenses. Those entitled to a refund must forward the Refund Documents to the class plaintiff’s attorney within 180 days of the settlement approval date. The ITA will transfer the refund due to each class member within 150 days of the date of receipt of the documents.

On December 31, 2025, Israel enacted legislation imposing a minimum corporate tax on multinational groups, which applies to Israeli resident entities that are members of an MNE as of the 2026 tax year.

The Ministry of Justice recently published a draft bill for public comments, aimed at regulating the application of Israeli law to foreign dealers who target customers in Israel. The draft bill seeks to codify trends established by Supreme Court rulings in recent years into primary legislation and to set clear rules under which mandatory Israeli legal provisions will also apply to corporations headquartered outside of Israel, when their activities actually target the Israeli market.

On January 21, 2026, the Israel Competition Authority decided to impose a monetary sanction of approximately ILS 8 million on Shufersal, the leading retail chain in Israel, for failing to fully comply with data requests issued pursuant to Section 46(b) of the Economic Competition Law.

Amidst the growing use of artificial intelligence, 2025 was marked by a series of rulings in which courts sharply criticized references to erroneous sources in pleadings – a byproduct of unchecked and unverified use of AI tools.

In January 2026, the Israel Securities Authority (ISA) published a proposed amendment to the “Directive to licensees relating to service provision using technological means.” This directive was designed to align the provisions of the Regulation of Investment Advice, Investment Marketing and Portfolio Management Law, 1995 with the digital age.

The Bank of Israel recently issued its decision to expand the identification code used by banking corporations and nonbank entities to connect to payment systems from two digits to three digits. While ostensibly only a technical change, in practice it is a significant step that will enable financial entities to hold accounts and transfer funds for customers directly and independently, without relying on existing banks.