Israeli Business War Compensation

Israeli Business War Compensation

Problem

When war disrupts an Israeli business, the lost revenue, idled employees on חל"ת, and fixed costs that keep ticking can mean thousands of shekels in compensation per month - but the rules are split across two parallel frameworks (Iron Swords 2023 and Shaagat HaAri 2026), four mutually exclusive tracks, and a maze of thresholds that depend on VAT filing cadence, business location, turnover size, and employee headcount. Filing under the wrong track or missing a 25% / 12.5% threshold by a single percentage point forfeits the claim for that period, and the choice is usually irreversible.

Instructions

Step 1: Identify the framework

Two parallel frameworks operate today. Both rely on the same Property Tax & Compensation Fund Law, 1961 (חוק מס רכוש וקרן פיצויים, תשכ"א-1961), §§35–36, but each has its own hora'at sha'a (temporary order) regulations.

| Framework | Damage period | Filing deadline | Reference baseline | |---|---|---|---| | Iron Swords (תשפ"ד-2023) | From October 7, 2023 onward | Per qualifying period (regulation defines it; check the active regulation text) | Standard same-period prior-year | | Shaagat HaAri (March 2026) | March-April 2026 (תקופת הפגיעה 03-04/26) | Online: 30.06.2026; non-online: 31.05.2026 | Same period 2025 (or 2023 for evacuated north) |

Statutory anchors. The Shaagat HaAri framework was passed in second and third readings on 4.5.2026 and published in ספר החוקים 3525 as two parallel laws: חוק התוכנית לסיוע כלכלי (הוראת שעה) (סיוע לעסקים ולמוסדות ציבור), התשפ"ו-2026 (business-side, governs everything in this skill) and חוק התוכנית לסיוע כלכלי (הוראת שעה) (תעסוקה), התשפ"ו-2026 (employee-side, governs the chal"t dmei avtala flow, that's israeli-unemployment-benefits-navigator). Cite the published act, not the March 2026 draft framework, when communicating with the Tax Authority or in appeals.

Dedicated portal for Shaagat HaAri eligible-expenses claims. Use https://www.gov.il/he/service/claim-compensation-indirect-damage-rions-roar for the March-April 2026 indirect-damage track ("מסלול הוצאות מזכות"). This is distinct from the general Iron Swords portal (https://www.gov.il/he/service/compensation-indirect-damage) and the special-area portal (https://www.gov.il/he/service/claim-compensation-indirect-damage). Filing under the wrong portal routes to the wrong adjudication track.

Ask the user when their revenue loss occurred and route accordingly. Most live claims in 2026 still fall under Iron Swords for older damage periods.

Step 2: Check the four-gate eligibility test

Reject early if any gate fails - the system rejects with no recourse.

| Gate | Rule | If user fails | |---|---|---| | Business registration date | Registered before 31.12.2024 uses standard same-period prior-year baseline. Newer businesses use an alternate baseline (Jan-Feb 2025 → Mar 2025-Feb 2026; March 2025 onward → first reporting period through Feb 28, 2026) | NOT a hard cliff; baseline formula simply changes | | Annual turnover band | Between 12,000 NIS and 400,000,000 NIS | INELIGIBLE if outside band | | Turnover decline (monthly VAT filer) | ≥ 25% drop, March 2026 vs March 2025 | INELIGIBLE for wage/fixed-cost track | | Turnover decline (bi-monthly VAT filer) | ≥ 12.5% drop, Mar–Apr 2026 vs Mar–Apr 2025 | INELIGIBLE for wage/fixed-cost track |

Northern exception: If the business is in an evacuated yishuv on the northern border (Galilee), compare against 2023 instead of 2025, AND the minimum decline gate is waived for the northern dedicated track.

Step 3: Pick the highest-yield track (mutually exclusive)

A business can file under only ONE track per damage period. Run all four and recommend the highest.

| Track | Who qualifies | What it pays | Filing form | |---|---|---|---| | Red track §35 | Border-area yishuvei sfar (predefined list) | No upper cap; up to 100,000 NIS advance available | Red-track form on gov.il/he/Departments/DynamicCollectors/compensation-tracks | | Small business continuity grant (מענק המשכיות עסקית) | Turnover ≤ 300,000 NIS | Fixed-amount table lookup (see Step 4b) | Small-business form (separate flow) | | Nationwide turnover/wage track | Turnover 300,000 NIS to 400M NIS, declined ≥25% (or 12.5% bi-monthly) | MAX(wage track, fixed-cost track) - see Step 4 | תביעת פיצויים נזק עקיף on gov.il/he/service/compensation-indirect-damage | | Special-area track | Specific yishuvim outside the red list but designated as special | Track-specific formula | Same portal, marked as special area |

Step 4: Calculate the wage track AND the fixed-cost track, take the higher

For the nationwide track only. Both branches are computed; the system pays the larger.

Wage participation grant (per evidence.json claim wage-grant-formula):

declineRate    = (refTurnover - claimTurnover) / refTurnover      // e.g., 0.40 for 40% drop
rawWageGrant   = 0.75 × declineRate × actualWagesInClaimPeriod
perEmpCap      = 13_773 × numberOfEmployees × declineRate          // 13,773 NIS = average wage in economy
wageGrant      = min(rawWageGrant, perEmpCap)

Fixed-cost (inputs) track: tiered multiplier × monthly fixed expenses × number of months in the reporting period.

| Decline tier | Multiplier on monthly fixed expenses | |---|---| | 25% – 40% | 7% | | 40% – 60% | 11% | | 60% – 80% | 15% | | 80% – 100% | 22% |

Pay whichever is higher. Most labor-heavy businesses (cafés, salons, agencies) come out ahead on the wage track. Most rent-heavy / inventory-heavy businesses come out ahead on the fixed-cost track.

Step 4b: Small business continuity grant table (turnover ≤ 300,000 NIS only)

Single monthly payment, no formula. Look up the (annual turnover band, decline tier) cell. Post-passage authoritative values per Kol-Zchut (updated after the law passed Knesset 4.5.2026). Pre-passage Mako/CPA-Institute figures (11-12.03.2026) were ~1.7-1.9% lower; do not quote those.

| Annual turnover (₪) | 25-40% decline | 40-60% | 60-80% | 80-100% | |---|---|---|---|---| | 12,000 - 50,000 | 1,864 | 1,864 | 1,864 | 1,864 | | 50,000 - 90,000 | 3,356 | 3,356 | 3,356 | 3,356 | | 90,000 - 120,000 | 4,475 | 4,475 | 4,475 | 4,475 | | 120,000 - 150,000 | 2,823 | 4,234.50 | 6,775.20 | 8,469 | | 150,000 - 200,000 | 3,329 | 4,993.50 | 7,989.60 | 9,987 | | 200,000 - 250,000 | 4,261 | 6,391.50 | 10,226.40 | 12,783 | | 250,000 - 300,000 | 4,980 | 7,470 | 11,952 | 14,940 |

Notes:

• All amounts are NIS, single grant for the March-April 2026 damage period.
• The bottom three turnover bands (up to 120K) pay a flat amount regardless of decline tier (post-passage rule); the four bands above 120K scale by decline tier.
• Online filing window for this track: 17.05.2026 - 17.08.2026 per the kolzchut authoritative page; verify the active dates on https://www.gov.il/he/service/claim-compensation-indirect-damage-rions-roar before promising deadlines (windows have been extended multiple times since the law passed).
• The skill's scripts/calc_grant.py does NOT compute this table; it covers only the wage / fixed-cost track for businesses above 300K. For small businesses, route to the gov.il portal and reference this table.

Step 5: Stack with reservist & employee-side benefits (additive, not exclusive)

Three additional grants stack ON TOP of the indirect-damage track:

1. Employee חל"ת dmei avtala (per Treasury press release 30.03.2026, finalized by Knesset 4.5.2026): employees on continuous unpaid leave get unemployment payment for ALL days from day one once they clear the bifurcated minimum, 5 consecutive days ONLY if the chal"t started 28.2.2026 or 1.3.2026, 10 consecutive days for any later onset (effective 5.5.2026 amendment per btl.gov.il/StateOfEmergency/ShaagatHari/Pages/halat-shaagatHari1.aspx). The employee files separately at btl.gov.il; the employer doesn't claim this directly but must hand the employee an הסכם חל"ת agreement signed by both parties and file Form 100 with the exact halat start and end dates. Registration with שירות התעסוקה is also required (open retroactively until 14 May 2026). First payments for the 5-day early-onset cohort landed June 2026 because the bifurcation amendment was late; for the 10-day cohort, payments began processing through April-May 2026 as employees cleared the threshold. The exact mechanics (waiting-period waiver, vacation-day deduction rules) live on the Bituach Leumi Shaagat HaAri page; direct the employee there and to israeli-unemployment-benefits-navigator for the active rules.
2. Employer reservist compensation - for each employee called up on צו 8 reserve duty, the employer receives 20% of the employee's average daily wage × reserve duty days served, paid by Bituach Leumi to the employer.
3. Self-employed reservist grant (for owner who served themselves, separate from this skill's main scope) - covered in israeli-miluim-manager.

Step 6: Generate the filing checklist

Output a documentation pack the user must assemble before opening the gov.il filing.

Required documents (all tracks):

• VAT report 1301 (דוח עוסק) for reference period and claim period
• Profit & loss statement for the reference year
• ניהול ספרים (revenue books) for both periods
• Bank statements covering both periods
• Business registration confirmation (תעודת עוסק) showing pre-31.12.2024 registration

Wage track only:

• Form 102 (טופס 102) - payroll declaration for claim-period months
• Employee CSV: ID, name, gross monthly wage in claim period
• For each employee placed on חל"ת: signed הסכם חל"ת with start/end dates

Fixed-cost track only:

• Invoices or contracts for: rent, electricity, leasing, recurring SaaS, communications

Submission:

• Tax Authority online portal for Shaagat HaAri eligible-expenses track (March-April 2026): gov.il/he/service/claim-compensation-indirect-damage-rions-roar
• Tax Authority online portal for Iron Swords general nationwide track: gov.il/he/service/compensation-indirect-damage
• Tax Authority special-area portal (north / specific yishuvim): gov.il/he/service/claim-compensation-indirect-damage
• Red-track advance request (Shaagat HaAri): gov.il/he/service/request-for-dvance-dealers-shaagat-haari
• Hotline: *4954 (Tax Authority)
• Email: nezekakif@taxes.gov.il

Step 7: Communicate the cash-flow schedule

Set realistic expectations:

• 21 days after a complete filing: 60% advance payment lands.
• 150 days: full determination of the remaining 40%.
• 8 months: if no decision is issued, the claim is automatically approved.

Step 8: Plan for the tax bill on the grant

The grant is פיצוי פירותי - revenue-substituting compensation. It is taxable as ordinary business income at the recipient's marginal rate, reported on the annual return for the year of receipt. A business owner who treats it as windfall and doesn't reserve for tax can lose 30–47% of the grant to mas hachnasa surprise.

Surface this proactively. Suggest the owner top up מקדמות (advance tax payments) for the year, or apply for פריסה (income spreading) if the grant is large relative to typical annual income.

Step 9: Appeals if rejected or under-paid

The Property Tax & Compensation Fund Law, 1961 establishes a two-stage appeals path. For INDIRECT damage compensation (the subject of this skill), the appeals committee is established under §38ל (Chapter 8B, the indirect-damage compensation chapter), NOT under §29 (which covers general property-tax appeals).

| Stage | Filed with | |---|---| | השגה (objection) | The same assessing officer (פקיד שומה) who issued the decision | | ערר (appeal) | ועדת ערר under §38ל - independent appeals committee dedicated to indirect-damage compensation under the Property Tax Law |

Day-count windows for each stage are defined in the operative hora'at sha'a regulation rather than a fixed code rule, and they're tight (typically 30–60 days). Read the rejection letter carefully for the explicit deadline rather than relying on memory. Miss the השגה window and the ערר window slams shut too. Flag this immediately to any user with a denial or partial approval.

Recommended MCP Servers

| MCP | Why it pairs with this skill | Install | |---|---|---| | kolzchut (All-Rights / כל-זכות) | Authoritative entitlements knowledge base; covers business compensation, reservist owner grant, חל"ת mechanics with regulator citations | npx skills-il add skills-il/kolzchut --skill kolzchut |

Reference Links

| Source | URL | What to Check | |---|---|---| | Tax Authority press release | https://www.gov.il/he/pages/press11032026 | Shaagat HaAri framework details, red-track 100,000 NIS advance, 20% employer reservist comp, filing extensions | | Tax Authority filing portal (Iron Swords nationwide) | https://www.gov.il/he/service/compensation-indirect-damage | Filing form name, registration prerequisite, contact channels | | Tax Authority filing portal (Shaagat HaAri eligible-expenses, March-April 2026) | https://www.gov.il/he/service/claim-compensation-indirect-damage-rions-roar | Dedicated portal for the "מסלול הוצאות מזכות" Shaagat HaAri 2026 track, eligibility band 12,000-400M NIS, ≥25% decline test | | Tax Authority red-track advance request (Shaagat HaAri) | https://www.gov.il/he/service/request-for-dvance-dealers-shaagat-haari | 100,000 NIS advance request flow for border-area businesses | | Knesset passage announcement (4.5.2026) | https://www.gov.il/he/pages/sa040526-2 | Confirms final approval of both Shaagat HaAri assistance laws (ספר החוקים 3525) | | Kol-Zchut: Shaagat HaAri business owner Q&A | https://www.kolzchut.org.il/he/שאלותותשובותלעצמאיםובעליעסקיםבמהלךהמלחמהמולאיראן(מבצעשאגתהארי) | Plain-language coverage of eligibility, halat 5/10-day bifurcation, cross-references to specific regulations | | Tax Authority track index | https://www.gov.il/he/Departments/DynamicCollectors/compensation-tracks | Track exclusivity rules, list of red-track yishuvim | | Property Tax & Compensation Fund Law | https://www.nevo.co.il/lawhtml/law01/273001.htm | Statutory definitions, §§35–36 indirect damage, §38ל ועדת ערר for indirect damage (§29 is the general property-tax appeals committee, not the indirect-damage one) | | Bituach Leumi (Shaagat HaAri page) | https://www.btl.gov.il/About/news/Pages/hadasa2026saagathaaryiran.aspx | חל"ת 10-day rule (per Treasury 30.03.2026 framework brief), dmei avtala mechanics, employer reservist comp filing | | Treasury Ministry (אגף דוברות) framework briefs | https://www.gov.il/he/departments/ministryoffinance | 30.03.2026 "מתווה פיצויים למשק" brief: 10-day חל"ת rule, retroactive employment-service registration to 14.05.2026, NPO/daycare eligibility, northern 100% tracks | | Kol-Zchut general business compensation | https://www.kolzchut.org.il | Plain-language entitlement entries, document checklists | | Mako N12 framework summary | https://www.mako.co.il/news-money/2026_q1/Article-79d26c770b1ec91027.htm | Eligibility thresholds (25% / 12.5%), turnover band 12,000–400M NIS, wage formula |

Gotchas

1. Track exclusivity is per damage period, not per business. Choose the wrong track and the entire period's claim is forfeit (no reverting). Always run all four track calculations before recommending.
2. The 25% / 12.5% threshold is a hard cliff, not a sliding scale. A business at 24.9% decline gets nothing under the wage/fixed-cost track. The fixed-cost tier multipliers (7%/11%/15%/22%) only kick in once the gate is cleared.
3. The wage track cap stacks two limits, not one. Both 0.75 × declineRate × wages AND 13,773 × employees × declineRate apply; the grant is the LOWER of the two raw amounts (i.e., min of formula vs per-employee cap), not the sum. Computing them as additive overstates the grant by 50–100%.
4. Northern evacuated businesses use 2023 baseline AND have the decline floor waived - but only on the dedicated northern track. If the agent files under the

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Source & license

This open-source skill is cataloged on AgentStack and links to its original source — we do not rehost the code.

• Author: skills-il
• Source: skills-il/government-services
• License: MIT

Install and usage instructions live in the source repository linked above.