Operation Protective Edge was launched by the IDF on July 7 in response to rocket attacks. What are the fiscal and financial implications?

Tax reporting extension

The Israel Tax Authority (ITA) extended the monthly deadline for reporting and paying value-added tax (VAT) and income tax on salaries and other income from July 15 to July 20 for everyone in Israel. And this deadline was further extended to July 25 for residents down South living within 40 kilometers of the Gaza Strip. Moreover, tax officials were instructed to show understanding and sensitivity when dealing with appeals against fines, interest and indexation for business owners and their representatives called up to reserve duty.

At the time of writing the National Insurance Institute had not yet followed suit...

Compensation fund

The ITA has a property tax division that not only collects taxes, it has a property compensation fund that pays compensation for damage caused by hostilities.

In the first six days of Protective Edge, around 400 cases were opened. This followed around 100 cases of buildings, cars and farms damaged in the Sderot industrial area and elsewhere after June 27, but BEFORE Protective Edge began.

Seven families whose homes took a direct hit were placed in hotel accommodation.

The ITA has already opened a section for Operation Protective Edge on its website in Hebrew.

Alternatively, you can phone the help centers in Ashkelon/ Sderot (08) 662-3300, Haifa (04) 863-0402, Tiberias (04) 671- 4005/6, Jerusalem (02) 654-5231/4 and Tel Aviv (03) 763-3224.

Following is an overview of information presently posted on the website.

Do you have to notify your claim?


The property compensation fund is in constant contact with the IDF. As soon as possible after any incident, property compensation fund people and assessors head out to the place concerned. They go around the affected houses and businesses, explain their rights and help them fill out the claim forms.

Who pays the compensation?

Claims are filed with the State of Israel, which by law compensates citizens for damage to property resulting from hostilities in order to restore things to the way they were as soon as possible. The assessors determine the financial compensation needed to fix the damage, assisted by any other professionals designated by the affected person. If the affected person cannot deal with it, or wants the state to do it, the restoration is carried out by companies contracted to do so by the compensation fund.

How much can be claimed for damage to a home?

Compensation is paid based for household contents, but not cash, checks, jewelry or artwork, according to a standard table of items, having regard to the size of the family. For example, in the case of a married couple or single parent family, the compensation should be: furniture NIS 37,974, clothes NIS 13,741, electrical and electronic appliances NIS 36,468, other household possessions NIS 20,789, total NIS 108,972.

For each child, the total may increase by up to NIS 12,255. For each additional adult living in the home, the total may increase by up to NIS 26,734. For a single person living alone, the total compensation ranges up to NIS 67,577.

More insurance?

Israeli residents interested in insuring their household contents at a greater value than that fixed in the regulations may apply to the real estate tax offices in Beersheba, Haifa, Jerusalem or Tel Aviv, or the Ashkelon tax office, and fill out a “Declaration For Insuring Household Contents” and insure up an additional sum of up to NIS 863,808. The premium for insuring more is 0.3 percent of the additional insured sum. Payment is made in advance at a post office or bank and the receipt is attached to the declaration. Alternatively, online payment is possible at the above mentioned website. The insurance expires December 31 annually.

What about vehicles?

The fund will refer damaged vehicles to any garage chosen for assessment and repair provided the repair is approved by fund assessors.

What about passersby?

Passersby whose possessions are damaged should try to present them to the fund in order to enable the damage to be assessed.

What about businesses?

Inventory and equipment are covered at market value before VAT. You must prove ownership based on financial statements, purchase invoices, inventory lists confirmed by a CPA, etc. Don’t throw out anything until the fund officials say so.

Cash and checks are not covered.

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