Client updates /  NPO

Starting January 1, 2026, NGOs and PBCs under Section 46 must report all donations through the Israel Tax Authority’s digital system to enhance transparency and prevent fraud. Compliance will be mandatory to maintain Section 46 approval.

The Registrar of NPOs issued updated regulatory relief to NPOs, NGOs and public benefit companies regarding their activities during the special state of emergency declared in Israel.

Upon the launch of Operation Rising Lion last Friday, the Minister of Defense declared a special national state of emergency in conformity with the Civil Defense Law, 1951. On Sunday, the government extended the state of emergency until June 30, 2025.

Due to the Swords of Iron War and the state of emergency, the Registrar of Amutot and Endowments published a new directive extending the deadlines for NPOs to file their 2023 annual reports in order to enable them to obtain a Certificate of Proper Management for 2025.

According to the new guidelines, until the declared state of emergency in Israel is over, NPOs (amutot and public benefit companies) may conduct activities intended to provide immediate and vital assistance during the war, even if these activities do not fall under their approved objectives.

The Israeli Supreme Court has ruled that NPOs are entitled to receive an exemption from real estate betterment levies, provided they use the proceeds from the sale of such real estate for a public purpose specified in the law.

While substantial defects were found in the nonprofit organization (amutah), the court accepted and approved a settlement. Issuing a dissolution order to the amutah would have affected a large community of people that require its services.

The Israeli website “GuideStar,” which provides information about Amutot (One of the common types of non-profit organizations in Israel) and PBCs, launched a new and important interface that enables these organizations to independently update their details and information.

The Israeli High Court of Justice ruled recently that section 46 of the Income Tax Ordinance does not authorize the Knesset Finance Committee to exercise broad discretion in recognizing NPOs and in fact the Committee’s approval is limited solely to that related to its supervisory role.

As part of its effort to deal with the coronavirus crisis, the Social Services Division of the Accountant General’s Department at the Israeli Ministry of Finance recently released an aid package for the benefit of third-sector organizations.