Israel: Tax developments in response to COVID-19
General Information
This page offers an overview of tax developments being reported globally by KPMG member firms in response to the Novel Coronavirus (COVID-19).
The content will be updated regularly. However, due to the fast-moving pace of change, it may not always reflect the most current developments in a given jurisdiction. Please refer to the date of accuracy and refer to the relevant links, under additional information, for original source information.
Date accurate as of: 31 March 2020
The Israeli government on 27 March 2020 published Temporary Regulations #8432 to provide tax-relief measures related to the coronavirus (COVID-19) pandemic.
The regulations provide extensions of time for certain tax-related deadlines. Specifically, the period 22 March 2020–31 May 2020 is not considered to include “calendar days” for purposes of determining tax-related deadlines and certain terms established under the Israeli tax laws. In particular, the regulations extend the following:
Dates provided by the income tax law:
- Deadlines for the tax authorities to answer a taxpayer request for an advance pricing agreement
- Deadlines for distribution of stock options to employees after approval
- Deadlines for submission of notification of certain qualified tax-neutral reorganizations
- Certain deadlines for collection of tax debts
- Deadlines for auditing tax returns
- Deadlines for taxpayers to appeal the tax authorities decisions
Dates provided by the value added tax (VAT) law:
- Deadlines for auditing tax returns
- Deadlines for taxpayers to appeal certain types of tax authorities’ decisions
Dates in the real estate tax law:
- Deadlines for issuance of a written decision by the tax authorities
- Deadlines for various notifications that need to be submitted to the tax authorities—in particular, notifications of selling an apartment
- Deadlines for the tax authorities to confirm or contest the value used in a transaction and for the taxpayer to appeal this determination
Dates in the law for encouraging investments:
- Deadlines for applying for the "election year" for start of the benefits
- Deadlines for applying for advance approvals
The regulations also address deadlines in other “minor” or grandfathered tax laws. Regarding other tax-related measures, the regulations extend the:
- Deadline for filing annual corporate income tax reports—the due date of 31 May is postponed to 31 July 2020 (further extensions are available upon request), and the same deadlines apply for individual income tax reports submitted electronically.
- Deadline for filing paper individual income tax reports—the due date of 30 April is postponed to 30 June 2020 (further extensions are available upon request).
- Deadline for monthly VAT reporting and payment—the due date of 16 March is postponed to 26 March 2020.
- Deadline for bi-monthly VAT reporting and payment—the due date was postponed from 15 April to 27 April 2020.
- Deadline for renewing annual withholding tax certificates—the due date is postponed from 31 March to 30 April 2020.
VAT deductions
The VAT authorities will allow an input VAT deduction to be claimed with the submission of a scanned copy of a tax invoice issued in the period between 1 March 2020 and 31 May 2020 (normally a signed paper original or a digital copy with electronic signature is required).
Social Security measures
Entrepreneurs affected by the COVID-19 situation may apply for decrease of social security advance payments. For self-employed individuals, the deadline for the March 2020 social security payments is postponed from 15 April 2020 to 15 May 2020.
