Approved by the Knesset: Compensation framework for businesses due to indirect damages from the "Roaring Lion" operation"
On Monday, May 4, 2026, the Knesset plenum approved in its second and third readings the compensation plan for businesses that suffered indirect damages during the fighting days of Operation "Lion's Roar.".
Requests for advance payments are expected to be open for submission beginning May 5, 2026Click here To linkwhile the final claims submission system for the compensation fund is expected to go live on May 17, 2026.
The system is expected to be open for submissions until August 16, 2026.
However, at this stage, we recommend not applying for an advance payment and waiting to apply for compensation until the reporting and income turnover data and the monthly report for April 2026 are completed and entered into the Tax Authority's computers, until detailed directive is published by the Tax Authority, and until the Tax Authority personnel finish dealing with possible technical malfunctions in the submission system, which may harm eligibility for compensation.
Key points of the law and what's important to know:
According to the law approved by the Knesset Plenum, businesses in Israel will be entitled to compensation through a special track of deductible expenses – similar to the grants given at the beginning of the Swords of Iron War and Operation "With All Your Might." As part of the legislation, a long-term mechanism for a period of five years was established, designed to create certainty for businesses in Israel and enable rapid operation.
Of the framework for eligible expenses and non-compete clauses during a special home front situation.
The compensation will be given as a one-time grant, due to a decrease in revenue in March-April 2026, and will reflect the business's salary and fixed expenses.
The grant amount will be awarded in a manner Differential. Meaning, as the business experiences a decline Significantly more in the business cycle, so will grow Compensation amount.
Self-employed individuals with an annual turnover of up to NIS 300,000 will be eligible for a fixed sum according to the level of damage, even without proof of salary expenses or fixed expenses.
Eligibility requirements
– My annual turnover is between NIS 12,000 and NIS 400 million in 2025.
– A decrease of at least 25% in trading volume in March–April 2026 compared to March–April 2025. For certain businesses, including contractors, educational institutions, and those reporting on a cash basis, the review period may be postponed, in accordance with instructions to be published.
How is the grant calculated?
Fixed expense component
The grant will be calculated according to the business's fixed expenses in 2025, divided by 6, and multiplied by a coefficient determined by the rate of damage.
Salary component
The wage component will be calculated based on the lower of the following two amounts: 75% of the wage expenses for March–April 2026, or the average wage in the economy multiplied by the number of employees. The lower of the two amounts will be multiplied by 1.25 and by the rate of decline in turnover.
Additional points
The first five days of fighting were also recognized as canceled leave days, and a compromise was reached allowing employers to receive compensation for the salary component even for employees who took canceled leave for up to ten days in March. It should be emphasized that an employer who put their employees on canceled leave in April 2026 will not be eligible for the inclusion of the salary component in the compensation calculation.
In addition, the outline addresses compensation for indirect damage resulting from direct damage, as well as compensation for loss of rental income under certain conditions.
Within the committee discussions, a special compensation track was agreed upon for settlements in the North that are not frontline settlement communities. This is expected to be regulated in separate legislation within regulations.
Additionally, it was agreed to allocate 40 million NIS for budgeting and support of public institutions whose revenues decreased during and as a result of the operation, with the allocation criteria to be determined within 30 days of the law's commencement.
For more details, please contact:
Ms. Tamar Teharni, the caregiver for the applications. Email: [email protected] Phone: 073-3444820
CPA Kobi Israeli, Partner in charge of professional response in grant management. Email: [email protected] Phone: 03-5610011 / 073-3444948
Do not rely on or use this circular in any way without obtaining appropriate professional advice, as the purpose of the circular is solely to draw your attention to its contents.
