End of the year tax guide

Just in case you didn’t know, the Israeli Tax Authority (ITA) offers a tax benefit for charitable donations made throughout the year. The purpose of this benefit is to encourage more people to get involved and contribute to recognized Israeli nonprofit organizations. 

In order for a donation to qualify for this benefit, the donation needs to be made to a charity that has the requisite Section 46 status. By the way, this can also be done conveniently online. But wait, what is Section 46?

What is Section 46 of the Income Tax Ordinance?

Section 46(a) of the Income Tax Ordinance stipulates that for any donation exceeding 200 ILS (as of 2023), a tax refund of more than one-third of the donated amount (35% of the donation amount, to be exact) can be claimed. To be eligible under Section 46, a public institution must meet specific regulatory criteria.  

To save you the trouble of checking the status of each charity, all organizations appearing on our platform have been vetted; only those holding Section 46 status appear on our website.

As of 2023, refunds can be claimed for donations up to 9,517,000 ILS or up to 30% of the donor's taxable income for that year.

How do I claim tax refunds on donations?

Whether you're employed or self-employed, to claim a tax refund for your donations, at the end of the tax year you need to submit all original donation receipts to the ITA.  Refunds can be claimed for donations made up to six years ago, but note that the refund threshold for donations is periodically updated. If you donate through us or you have donated through JGive in the past, you can find a centralized receipt in your personal area for all your donations each year.

Donors on the JGive platform have the option to generate a centralized receipt that consolidates all their donations throughout the year, eliminating the need to track and submit multiple original receipts.

Tax refund process for employees:

1. Complete a short identification process on the ITA’s digital system.

2. Start the online tax coordination process.

3. If you donated through JGive, upload the centralized receipt to this online system.

4. If you have made donations elsewhere, please attach receipts for each donation (original receipts, copies with a "true to source" stamp or electronic receipts), along with any salary slip from your workplace.

5. If you have contributed through other methods, it is necessary to scan and upload all original receipts to the online system. Since confirmation of the tax credit usually takes 14 days to be approved, it's advisable to submit the request with enough time in advance of the end-of-year. 

6.Submit the approval to your employer.

Tax refund process for self-employed individuals:

Self-employed individuals are required to attach the donation receipt to the annual report they submit at the end of the tax year. JGive donors can also upload the centralized receipt. Those who donated through other means must attach all original receipts, copies with a "true to source" stamp, and electronic receipts to their annual report. The credit will be granted only at the time of the final tax assessment.

You can also delay the decision about whom to donate to and still receive a tax refund

If the end of the year has arrived, and you haven't yet decided how to allocate your donation funds, you can deposit any amount you wish into a donor-advised fund (DAF) on our platform. At the time of deposit, you receive a tax receipt on the full amount and then you can later decide which organization to donate to. The deposited amount will remain in your fund until you decide to distribute it over time to any recognized Israeli charity.