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Law for the Increase of the Rate of Participation in the Labour Force and the Reduction of Social Gaps (Work Grant), 5768-2007

חוק להגדלת שיעור ההשתתפות בכוח העבודה ולצמצום פערים חברתיים (מענק עבודה), תשס"ח-2007

Published: 2007-12-27Consolidated Hebrew text as of 2026-01-01 · Last amended 2024-03-20✓ Amendment status checked against the Knesset legislation record on 2026-09-29
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Unofficial English translation — for reference only. It may contain errors or omissions and cannot be relied on as a legal text. Only the Hebrew text published in Reshumot is legally binding.More

This English text was translated from the official Hebrew using a range of translation tools, and it undergoes ongoing checks and updates. It is not a certified translation.

Despite these checks, it may contain errors, omissions, or imprecise renderings of legal terminology and cross-references, and it may not yet reflect the latest amendments. It cannot be relied upon as a legal text.

The Hebrew text as published in Reshumot (ספר החוקים) and on the Knesset website is the sole authoritative and legally binding version. In any discrepancy, the Hebrew text prevails.

This translation is provided for informational purposes only and does not constitute legal advice. For use in legal proceedings, request a certified Expert Legal Opinion.

Chapter III-C (Expired)(Repealed)

18x.§

to 18ak. (Expired).

18y.§

(Repealed — תש״ף־3)

18z.§

(Repealed — תש״ף־3)

18aa.§

(Repealed — תש״ף־3)

18ab.§

(Repealed — תש״ף־3)

18ac.§

(Repealed — תש״ף־3)

18ad.§

(Repealed — תש״ף־3)

18ae.§

(Repealed — תש״ף־3)

18af.§

(Repealed — תש״ף־3)

18ag.§

(Repealed — תשפ״ב־5)

18ah.§

(Repealed — תש״ף־3)

18ai.§

(Repealed — תש״ף־3)

18aj.§

(Repealed — תש״ף־3)

18ak.§

(Repealed — תשפ״א־4)

18al.§

(Repealed — תיקון מס' 14 (תיקון מס' 3), 2021)

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Chapter IV: General Provisions

Powers of the Director§

19.
(a)The powers of the Director under Chapter II of Part 8 of the Ordinance shall vest in him to the extent required for the purpose of implementing the provisions of this Law, with the necessary modifications.
(b)Without derogating from the provisions of subsection (a) and notwithstanding the provisions of any law, the Director may receive from the National Insurance Institute any information of a type prescribed by the Minister of Finance, in consultation with the Minister of Welfare and Social Services and the Minister of Justice, and with the approval of the Finance Committee of the Knesset, which reached the National Insurance Institute in the course of performing its functions and which is required by the Director for the purpose of fulfilling his functions under this Law, all in the manner and at the time prescribed by the Minister of Finance as aforesaid.
(c)The Director may instruct that an employer or a person who pays an early pension as referred to in section 355(a1)(1a) of the National Insurance Law shall submit to the Director, as he shall instruct, online, the reports that he is required to submit to the National Insurance Institute under that section, all on condition that the Director has reported to the Finance Committee of the Knesset that the Israel Tax Authority is equipped to receive the said reports.

Powers of Investigation and Search§

20.

A person authorised under section 227 of the Ordinance shall have the powers referred to in that section for the purpose of preventing offences under this Law or for the purpose of detecting them.

Right of Representation§

21.

Section 236 of the Ordinance shall apply to the representation of an employee and a self-employed person for the purposes of this Law, with the necessary modifications.

Publication of Information§

21a.

All information regarding a grant under the provisions of this Law and the manner of its payment and regarding the submission of claims for a grant shall be published on the website of the Israel Tax Authority, in the Hebrew, Arabic, Russian and Amharic languages.

Service of Notices§

22.

The provisions of section 238 of the Ordinance shall apply to the service of notices under this Law.

Implementation and Regulations§

23.

The Minister of Finance is responsible for the implementation of this Law.

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Chapter V: Indirect Amendments – Online Reporting

Amendment of the Income Tax Ordinance [New Version] – No. 161§

24.

In the Income Tax Ordinance [New Version] –

(1)in section 1, after the definition of "business" the following shall be inserted:

""output" – as defined in the Computers Law, 5755-1995;";

(2)in section 131, after subsection (b1) the following shall be inserted:

"(b2) (1) An individual who is required to submit a report under subsection (a)(1) to (4), (5a), (5c), (5d) and (6), and who has income under section 2(1), (2) or (8), shall submit the report under the provisions of this section online, as the Director shall instruct, accompanied by a declaration in a form prescribed by the Director stating that the particulars and information provided in the report are correct and complete, as well as an output signed by him of the said report (hereinafter – online self-employed report);

(2)an individual as referred to in sub-paragraph (1) who has not submitted an online self-employed report shall be deemed, for the purposes of provisions under this Ordinance, to be a person who has not submitted a report;
(3)provisions under this Ordinance in respect of a report under section 131 shall apply to an online self-employed report, unless expressly stated otherwise;
(4)notwithstanding the provisions of paragraph (1), the Minister of Finance may, with the approval of the Finance Committee of the Knesset, prescribe categories of individuals who shall be exempt from the obligation to submit an online self-employed report, in accordance with criteria of economic status, level of income and health status, as well as for other special reasons, to be prescribed by Regulations, provided that such an exemption shall not apply to an individual who has submitted a claim to receive a grant under the Law for the Increase of the Rate of Participation in the Labour Force and the Reduction of Social Gaps (Negative Income Tax), 5768-2007.";
(3)in section 132, in subsection (b), after paragraph (1) the following shall be inserted:

"(1a) an individual who is required to submit an online self-employed report – shall submit it by 31 May following the tax year in respect of which the report is submitted;";

(4)in section 166, the text thereof shall be designated "(a)" and after it the following shall be inserted:

"(b) An employer or a deductor shall submit a report as referred to in subsection (a) in respect of the payment of employment income to an employee (form 0126) and in respect of the payment of income subject to deduction (form 0856), online, as the Director shall instruct, by 30 April following the tax year in respect of which the report is submitted, accompanied by a declaration in a form prescribed by the Director stating that the particulars and information provided in the report are correct and complete, as well as an output signed by him of the said report (hereinafter – online employer report and online deductor report, as the case may be).";

(c)In this section –

"income subject to deduction" – payments prescribed under section 164 as income for the purposes of that section, as set out below:

(1)insurance commission;
(2)fees of artists, fees of examiners, fees of lecturers, fees of providers of office services, fees of directors and fees of sportspersons;
(3)fees of writers;
(4)payment for agricultural work or agricultural produce;
(5)payments for construction works or transportation works;
(6)payments for clothing works, metalwork, electrical and electronics works and transportation works;
(7)payments for the processing of diamonds or for trade in diamonds;
(8)payments for services or assets;

"employee" – excluding an employee who works in the private household of an individual.";

(5)after section 195a the following shall be inserted:

"Section F: Financial Penalty in respect of an Online Report

Financial penalty

195b.§

Notwithstanding the provisions of Section C, where the Director has reasonable grounds to believe that an online report has not been submitted by the date referred to in section 132 or 166, as the case may be (in this Section – the violation), he may impose on the violator a financial penalty in the amount set out below, in respect of each full month of delay in submitting the report:

(1)an individual who has not submitted an online self-employed report under section 131(b2) – NIS 1,000;
(2)an employer who has not submitted an online employer report or a deductor who has not submitted an online deductor report, under section 166 – NIS 1,500.

Demand for financial penalty and its payment

195c.§

A financial penalty for a violation under section 195b shall be paid pursuant to a written demand by the Director, in a form prescribed by him (in this Section – the notice of liability), within 30 days of the date of dispatch of the notice of liability; the notice of liability shall set out, inter alia, the particulars of the violation in respect of which the financial penalty was imposed and the rate thereof, and shall also include information regarding the right to submit arguments before the Director, as referred to in section 195d.

Statement of arguments

195d.§
(a)An individual, employer or deductor to whom a notice of liability has been sent may, within 30 days of the date of dispatch of the notice as aforesaid, submit to the Director, in writing, his arguments regarding the imposition of the financial penalty and its rate (in this section – statement of arguments); the statement of arguments shall be accompanied by an affidavit attesting to the facts set out therein.
(b)Where an individual, employer or deductor has submitted a statement of arguments to the Director, the Director shall decide, on the basis of the statement of arguments and the affidavit, whether to leave the notice of liability in force or to cancel it, and he may, for the purpose of making such a decision, summon the person who submitted the statement of arguments to a hearing before him; notice of the Director's decision under this subsection shall be sent to the person who submitted the statement of arguments.
(c)The submission of a statement of arguments under this section shall not stay payment of the financial penalty at the date referred to in section 195c.
(d)Where the financial penalty has been paid and the Director has decided under this section to cancel the notice of liability, the financial penalty shall be refunded together with linkage differentials and interest within their meaning in the Interest and Linkage Law, 5721-1961 (in this Section – the Interest and Linkage Law), from the date of its payment until the date of its refund.

Update of the amount of the financial penalty

195e.§
(a)A monetary sanction shall be in accordance with its updated amount on the day of dispatch of the notice of liability, and if a petition has been filed and the court hearing the petition has ordered a stay of its payment – in accordance with its updated amount on the day of the decision on the petition.
(b)The amount of the monetary sanction shall be updated on 1 January of each year (in this section – the update date), in accordance with the rate of increase of the index that was known on the update date in the year preceding it, and in respect of the first update date – compared with the index that was known on 1 January 2008; the said amount shall be rounded to the nearest amount that is a multiple of NIS 10.
(c)The Director shall publish, by notice in Reshumot (Official Gazette), the updated amount of the monetary sanction.

Linkage differentials and interest

195f.§

If a monetary sanction is not paid on time, linkage differentials and interest thereon, within the meaning of the Interest Law, shall be added to it for the period of delay, until its payment (in this section – late payment addition).

Collection

195g.§

The Tax (Collection) Ordinance shall apply to the collection of the monetary sanction and the late payment addition.

Preservation of criminal liability

195h.§
(a)Payment of a monetary sanction shall not derogate from the criminal liability of an individual, employer or withholder in respect of the breach.
(b)If an indictment has been filed against an individual, employer or withholder for an offence under section 216(4) or (4a), that person shall not be liable for payment of the monetary sanction in respect thereof, and if paid – the amount paid shall be refunded to that person together with linkage differentials and interest within the meaning of the Interest Law, from the day of payment until the day of refund.

Petition to an Administrative Affairs Court

195i.§
(a)The filing of a petition to a court against liability for payment of a monetary sanction under this Section, in accordance with item 32(5) of the First Schedule to the Administrative Affairs Courts Law, 5760-2000, shall not stay the payment of the monetary sanction, unless with the consent of the Director or if the court so ordered.
(b)If a petition as referred to in subsection (a) has been granted after the monetary sanction was paid, the monetary sanction shall be refunded together with linkage differentials and interest within the meaning of the Interest Law, from the day of payment until the day of refund.";
(6)In section 216, after paragraph (4) the following shall be inserted:

"(4a) a person who did not submit on time an online withholder's report or an online employer's report, in accordance with the provisions of section 166;".

Amendment of the Administrative Affairs Courts Law – No. 30§

25.

In the Administrative Affairs Courts Law, 5760-2000, in the First Schedule, in item 32, after paragraph (4) the following shall be inserted:

"(5) A decision of the Director under Section F of Chapter II of the Income Tax Ordinance [New Version]."

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Chapter VI: Commencement, Application and Temporary Provisions

Chapter II – Commencement, Application, Temporary Provisions and First Regulations§

26.
(a)The commencement of Chapter II is on the 23rd of Tevet 5768 (1 January 2008) or on the date of entry into force of regulations made under section 19(b), whichever is the later, and the provisions of that Chapter relating to the payment of a grant shall apply in respect of actual months of work of an employee in tax year 2007 or in the first tax year in which the date of entry into force of such regulations falls, whichever is the later, and onwards.
(b)First regulations under section 19(b) shall be brought for the approval of the Finance Committee of the Knesset within four months from the day of commencement of this Law.
(c)Notwithstanding the provisions of Chapter II and subject to the provisions of subsections (a) and (b), in each of the tax years 2008 to 2011, a grant shall be paid in respect of actual months of work in the preceding tax year only to an employee whose residential address, according to the Population Registry within the meaning of the Population Registry Law, 5725-1965 (hereinafter – the Population Registry Law), is in a locality whose area has been designated under section 59(a) of the Economic Policy Law for Fiscal Year 2004 (Legislative Amendments), 5764-2004 (hereinafter – the Economic Policy Law), for the purpose of integrating benefit recipients in employment.
(d)In respect of a grant paid to an employee for actual months of work in tax year 2007, the following sections shall be read as follows:
(1)In section 7(a), in paragraph (1), instead of "30 September" there shall come "31 December", in paragraph (2), instead of "30 April" there shall come "30 June", and in paragraph (3), instead of the concluding part beginning with the words "online self-employed report" there shall come "a report as aforesaid";
(2)In section 12, paragraph (1) – shall be deleted, in paragraph (2), instead of "until 30 June" there shall come "until 31 August", and after paragraph (3) the following shall be inserted:

"(3a) If the claim was submitted by 31 December of the following tax year, the grant shall be paid in a single payment, on 15 April in the tax year after the following tax year.""

(3)In section 166 of the Ordinance, instead of "30 April" there shall come "30 June".
(e)Notwithstanding the provisions of subsection (c), in each of the tax years 2010 and 2011, a grant shall be paid in respect of actual months of work in the preceding tax year (in this subsection – the preceding tax year), in accordance with the provisions of Chapter II, also to an employee who does not satisfy the condition referred to in that subsection, provided that all of the following conditions are met:
(1)The employee had, in the preceding tax year, at least one child who had not yet reached the age of two;
(2)The employee satisfied, in the preceding tax year, the conditions entitling to half a credit point or more under sections 40(b)(1) or 66(c)(3) of the Ordinance.

Chapter III – Commencement, Application and Temporary Provision§

27.
(a)The commencement of Chapter III is on the 5th of Tevet 5769 (1 January 2009), and its provisions shall apply in respect of average monthly income generated in tax year 2008 and onwards.
(b)Notwithstanding the provisions of subsection (a), in respect of each of the tax years 2008 to 2010, the provisions of Chapter III shall apply in respect of average monthly income generated in that tax year only by a self-employed person whose residential address, according to the Population Registry within the meaning of the Population Registry Law, is in a locality whose area has been designated under section 59(a) of the Economic Policy Law, for the purpose of integrating benefit recipients in employment.
(c)Notwithstanding the provisions of subsection (b), in respect of each of the tax years 2009 and 2010, the provisions of Chapter III shall apply in respect of average monthly income generated in that tax year by a self-employed person, even if that person does not satisfy the condition referred to in that subsection, provided that all of the following conditions are met:
(1)The person has, in that tax year, at least one child who has not yet reached the age of two;
(2)The person satisfies, in that tax year, the conditions entitling to half a credit point or more under sections 40(b)(1) or 66(c)(3) of the Ordinance.

Chapter V – Commencement, Application and Temporary Provision§

28.
(a)The commencement of sections 1, 166, 195b to 195i and 216 of the Ordinance, as worded in section 24(1), (4), (5) and (6) of this Law, and item 32(5) of the First Schedule to the Administrative Affairs Courts Law, 5760-2000, as worded in section 25 of this Law, is on the 23rd of Tevet 5768 (1 January 2008), and the provisions of those sections shall apply in respect of an online employer's report and an online withholder's report that are to be submitted for tax year 2007; however, in tax year 2008, in section 166(b) of the Ordinance, as worded in section 24(4) of this Law, instead of "30 April" there shall be read "30 June".
(b)The commencement of sections 131 and 132 of the Ordinance, as worded in section 24(2) and (3) of this Law, is on the 5th of Tevet 5769 (1 January 2009), and the provisions of those sections shall apply in respect of an online self-employed report that is to be submitted for tax year 2008.

Ehud Olmert Roni Bar-On

Prime Minister Minister of Finance

Shimon Peres Dalia Itzik

President of the State Speaker of the Knesset

Gafni

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