Your taxes: Corona business update

Claim at the relevant governmental (usually the Israel Tax Authority) website and give your bank account details, otherwise you might miss out. Delays are occurring. Mistakes can now be appealed.

Calculating taxes (photo credit: INGIMAGE)
Calculating taxes
(photo credit: INGIMAGE)
On Sunday, the Israeli Cabinet imposed a general lockdown from Friday, September 18, at 2pm, until Sunday, October 11.
Most businesses can continue to operate without accepting visitors, according to new rules drawn up by the finance minister.

It seems essential that businesses can continue accepting visitors. However, non-essential businesses engaged in trade, culture, leisure and tourism will be closed, including pools, gyms and restaurants. Significantly, schools will be closed except for special education.
After October 11, a “traffic light” color-coded system of local restrictions might be decided upon.
Below is a summary of business grants currently available.
Claim at the relevant governmental (usually the Israel Tax Authority) website and give your bank account details, otherwise you might miss out. Delays are occurring. Mistakes can now be appealed.
Back-to-work job grants:
Government grants of up to NIS 7,500 per qualifying employee taken on in June-September or July-October (depending on which is chosen), and are available to employers in most sectors other than state-funded bodies. The application must be made within 60 days after the end of the relevant month (the first being June). There is no need to prove any sales drop. These grants are subject to income tax and national insurance, but not VAT.
Economic safety net program 2020-2021 – social grants:
The government paid an up-front grant of up to NIS 7,500 and intends paying up to NIS 15,000 every two months to freelancers,and company owners regarding the claim period May 1, 2020-June 30, 2021.
This is provided there was a sales drop of at least 40% in the grant entitlement months compared with the previous year, AND taxable income in 2018 or 2019 was in the range NIS 8,568-NIS 651,600. Applications may be filed on the 15th day following each month claimed, but within 90 days of each respective date. These grants are subject to income tax, but not national insurance or VAT.
Economic safety-net program 2020-2021 – fixed cost participation grants:
Safety-net fixed-cost participation grants are available regarding the claim period May 2020-June 2021. In each case, the deadline for claiming grants regarding May-June 2020 is November 16, 2020. Claims for July-August were accepted from September 10. These grants are subject to income tax and national insurance, but not VAT.
FIRST, FOR freelancers (Osek Patur and Osek Morshe) that started up in January-February 2020, bimonthly grants of NIS 3,000-4,000 might be available if sales in 2020 are in the range NIS 18,000-NIS 100 million.
This is provided there was a sales drop of any magnitude in the claim period compared with January-February 2020 and sales of at least NIS 1,500 in January-February 2020.
Second, for freelancers, companies, charities and partnerships (not excluded bodies) with annual sales of NIS 18,000-NIS 300,000, bimonthly grants of NIS 3,000-NIS 6,000 might be available if there was a sales drop of at least 40% in the claim period compared with the previous year.
Third, for freelancers, companies, charities and partnerships (not excluded bodies) with annual sales in the range NIS 300,000-NIS 400 million, bimonthly grants of NIS 6,000-NIS 500,000 might be available, provided there is a sales drop compared with the previous year. The minimum sales drop for these purposes is 40% if annual sales are in the range NIS 300,000-NIS 100 million, 60% if sales are in the range NIS 100 million-NIS 200 million, 80% if sales are in the range NIS 200 million-NIS 400 million.
“Third-wave”
fixed-cost participation grants:
Grants of up to NIS 400,000 might be available for freelancers, companies, charities and partnerships if they report income on a cash basis (no income until clients pay).
Annual sales (revenue) limits apply: NIS 300,000-NIS 20 million in the case of freelancers, NIS 18,000-NIS 20 million for other businesses. To qualify they must experience a 25%-60% drop in sales in March-June 2020 compared with last year. The claim deadline is November 1, 2020. The grants are subject to income tax and national insurance, but not VAT.
City taxes (arnona):
New regulations reduce arnona by 95% until June 2021 if annual sales were up to NIS 200 million but dropped by 60%, or NIS 200-NIS 400 million and dropped by 80%.
Laid-off:
Laid-off employees should continue claiming unemployment pay via the Employment Service website. People ages 67+ may claim adaptation grants on the National Insurance website of NIS 900-NIS 4,000 provided monthly pension income is under NIS 5,000.
Comment:
Check out ways of making money globally over the Internet. These include e-commerce (trading) and the “gig economy” (service jobs).
Keep well, and happy New Year!
As always, consult experienced tax advisers in each country at an early stage in specific cases. leon@h2cat.com. The writer is a certified public accountant and tax specialist at Harris Horoviz Consulting & Tax Ltd.