Dealing with the coronavirus economic crisis – update

Corona woes continue in Israel. Here is a round-up of recent developments on the economic front.

money (photo credit: REUTERS)
money
(photo credit: REUTERS)
Back-to-work grants
The fourth wave of business grants will be claimable starting July 15 on the website of the Employment Service. Previous grants were claimable from the Tax Authority. If conditions are met, the grants should be NIS 7,500 for employees taken back on or after June 1, 2020, and NIS 3,500 if taken back on or after April 19, 2020.
Grants are being formulated for employees who did not furlough employees and to repeat earlier grants and improve them for businesses with sales revenues that declined 60% according to a government announcement on June 29. Watch this space.
Time extensions are expected to be announced for anyone who has not yet applied for the earlier second and third waves of business grants.

Various business grants

General adaptation grants of up to NIS 5,000 (including VAT) are available for businesses that install, upgrade or publicize on a digital platform (website) for remote supplies of products and services, as well as adapting buildings and furniture in order to combat the effects of the coronavirus. Suitable for e-commerce and traditional businesses.
Grants of NIS 1000 (including VAT) are available for high-speed fiber-optic connection of your business to the Internet to your home or office using the FTTH (Fiber to the Home) standard, provided monthly charges do not exceed NIS 250.
Grants are also available for implementing EMV (Europay, Mastercard and Visa) contact-less credit card payments using cellphones. This will be a legal requirement in Israel from July 2021. Grants range up to 80% of the installation costs (incurred on or after June 14) or NIS 2,500 (including VAT), for up to 20 points of sale.
Grants are also available to help child day care centers (maonot) adapt to cononavirus at the rate of NIS 350-NIS 1,200 per child.
Applications must be filed no later than September 30, as the grants budget is limited. Details at: www.sba.org.il/hb/Pages/default.aspx.
Discounts for businesses
The Economy Ministry has published a long list of coronavirus discounts offered by suppliers to businesses. Some are well-known, all are worth checking out. For example: Zap 20%, Gett 9%, various product trade and supply websites 20%, Yes Marketing 40%, Blue Lion translations 10%, Ebay “wide range of benefits,” WeWork 15%.
Categories include: trading websites, digital systems for managing your business, bank transfer and cash settlement, advertising and marketing, cash flow and finance cost management, business information databases, pensions for freelancers, communications and computer services, personnel recruitment and management, corona adaptation, coworking hubs.
Our e-commerce contribution
We strongly believe e-commerce is the answer to the economic effects of the pandemic. Trade your way out of trouble. Unfortunately, the international tax scene is getting ever more complicated. There is a risk emerging of double taxation or worse. Therefore, to address the tax issues, we are offering three months of e-commerce tax consultancy using the beta version of a new e-commerce tax website we will shortly launch.

National Insurance income support for self-employed workers

A means-tested income-support payment is available for self-employed Israeli residents, provided they don’t have a vehicle worth more than NIS 41,373. Various conditions apply. For example, as of July 2020, for a married person aged 20 to 55 with two children and monthly income below NIS 5,437 who registers as unemployed and is not studying at an academic or religious institution (unless sent by the Employment Service), the income support payment may be NIS 2,628. For details: www.btl.gov.il/benefits/Income_support/Pages/zacautnew.aspx.

Unemployment pay for furloughed or dismissed employees

Unemployment pay will generally continue to be paid for periods up to August 16, according to detailed rules. See: www.btl.gov.il/Corona/Pages/Corona2.aspx.
Employers of furloughed employees may have to pay NIS 348 per employee per month regarding the period April-June, unless the National Insurance Institute instructs otherwise by July 15, the expected payment date. The Israeli CPA Institute recommends asking employees for a declaration whether they worked elsewhere or registered as freelancers at the National Insurance Institute even one day, to avoid paying the NIS 348.
If an employer tells a furloughed employee to return to work, he or she must do so and is no longer entitled to employment pay.
Adaptation grants for furloughed or dismissed employees aged 67+
Grants of NIS 1,000-NIS 4,000 continue for the over-67s with pension income below NIS 5,000 for June and July, and 50% for August. For details: www.btl.gov.il/about/news/Pages/manak-67-augost.aspx.
Above all, keep well!
As always, be careful and consult experienced advisers at an early stage in specific cases. The writer is a certified public accountant and tax specialist at Harris Horoviz Consulting & Tax Ltd. Leon@h2cat.com