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Law for the Reduction of the Use of Cash, 5778-2018

חוק לצמצום השימוש במזומן, תשע"ח-2018

Published: 2018-03-18Consolidated Hebrew text as of 2026-04-14 · Last amended 2026-03-31✓ Amendment status checked against the Knesset legislation record on 2026-09-28
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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

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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.

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Chapter IV: Offences

Prohibition on a Person Who Is Not a Dealer Acting in Contravention of the Restrictions on the Use of Cash and Cheques§

20.

A person who is not a dealer who does any of the following is liable to a fine at the rate referred to in section 6(c), provided that the amount of the fine shall not exceed 20 times the fine prescribed in section 61(a)(4) of the Penal Law:

(1)receives payment in cash for a transaction whose price exceeds the amount specified in item (2) of the First Schedule, in contravention of the provisions of section 2(b);
(2)gives a dealer payment in cash for a transaction in the course of the dealer's business whose price exceeds the amount specified in item (1) of the First Schedule, in contravention of the provisions of section 2(c);
(3)gives a person who is not a dealer payment in cash for a transaction whose price exceeds the amount specified in item (2) of the First Schedule, in contravention of the provisions of section 2(d);
(4)a tourist who gives a dealer payment in cash for a transaction whose price exceeds five times the amount specified in item (1) of the First Schedule, and if the amount has been changed pursuant to the provisions of section 33(b) – if the price of the transaction exceeds NIS 40,000, in contravention of the provisions of section 2(e);
(5)gives or receives payment in cash as wages, a donation or a loan, the amount of which exceeds the amount prescribed in item (1) of the First Schedule, in contravention of the provisions of section 2(g);
(5a)gives or receives payment in cash in exchange for a bill, where the amount of the bill exceeds the amount specified in item (1) of the First Schedule, in contravention of the provisions of section 2(g1)(1) or (2)(b) or (c);
(6)gives or receives payment in cash as a gift, where the amount thereof exceeds the amount prescribed in item (2) of the First Schedule, in contravention of the provisions of section 2(h);
(7)receives payment by cheque exceeding NIS 5,000, without the recipient's name being specified in the cheque as payee or endorsee, as the case may be, in contravention of the provisions of section 4(b);
(8)gives a dealer, in the course of the dealer's business, payment by cheque, without the dealer's name being specified in the cheque as payee or endorsee, as the case may be, in contravention of the provisions of section 4(c);
(9)gives a person who is not a dealer payment by cheque exceeding NIS 5,000, without the name of the payment recipient being specified in the cheque as payee or endorsee, as the case may be, in contravention of the provisions of section 4(d);
(10)endorses a cheque or receives an endorsed cheque, without the name and identity number of the endorser being specified in the cheque, in contravention of the provisions of section 4(e).

Prohibition on Receipt of an Amount in Cash by a Lawyer or Auditor in the Course of Providing a Business Service to a Client§

21.

A lawyer or auditor who, in the course of providing a business service to a client, receives an amount in cash exceeding the amount prescribed in item (1) or (2) of the First Schedule, as the case may be, in contravention of the provisions of section 2(f), is liable to a fine at the rate referred to in section 6(c), provided that the amount of the fine shall not exceed 20 times the fine prescribed in section 61(a)(4) of the Penal Law; in this section, "business service" – as defined in section 8b of the Anti-Money Laundering Law.

Deceit§

22.

A person who commits an act of deceit, including any of the acts listed below, with the intent of evading any of the prohibitions prescribed in section 2(a) to (h), is liable to imprisonment of three years:

(1)fraudulently splits a transaction, wages, a donation, a loan or a gift;
(2)records false particulars in a document.

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Chapter V: Supervision and Enforcement Powers

Authorisation of Supervisors§

23.
(a)The Administrator may authorise, from among the employees of the Israel Tax Authority, supervisors who shall be vested with the supervision powers under section 25 (hereinafter – supervisor), for the purpose of implementing the provisions of this Law.
(b)A supervisor shall not be authorised pursuant to the provisions of subsection (a) unless all of the following conditions are met:
(1)the supervisor has not been convicted of an offence which, by reason of its nature, severity or circumstances, renders the supervisor unfit, in the opinion of the Administrator, to exercise supervision powers;
(2)the supervisor has received appropriate training in the field of the powers that will be vested in the supervisor under section 25, as the Administrator has directed;
(3)the supervisor meets additional eligibility conditions as the Administrator has directed.

Authorisation of Inspectors§

24.
(a)The Administrator may authorise, from among the employees of the Israel Tax Authority, inspectors who shall be vested with the enforcement powers under section 26 (hereinafter – inspector), for the purpose of implementing the provisions of this Law.
(b)An inspector shall not be authorised pursuant to the provisions of subsection (a) unless all of the following conditions are met:
(1)the Israel Police has notified, not later than three months from the date of receipt of the inspector's particulars, that it does not object to the inspector's appointment on grounds of public safety, including on account of the inspector's criminal record;
(2)the inspector has received appropriate training in the field of the powers that will be vested in the inspector under section 26, as the Administrator has directed with the consent of the Minister for Internal Security, including in all of the following:
(a)explanations of the objectives of this Law;
(b)the powers of an inspector under this Law;
(c)concepts in the law of evidence and criminal procedure;
(d)the means of enforcing this Law;
(3)the inspector meets additional eligibility conditions as the Administrator has directed, in consultation with the Minister for Internal Security.

Supervision Powers§

25.

For the purpose of supervising the implementation of the provisions of this Law, a supervisor may –

(1)require any person to provide the supervisor with the person's name and address and to present before the supervisor an identity card or other official document identifying the person;
(2)require any person to provide the supervisor with any information or document required by the supervisor for the purpose of fulfilling the supervisor's function; in this paragraph, "document" – including a printout, as defined in the Computers Law, 5755-1995;
(3)enter any place to which entry is required for the purpose of fulfilling the supervisor's function, including a stationary vehicle, provided that the supervisor shall not enter a place used as a dwelling except pursuant to a court order.

Enforcement Powers§

26.

Where a suspicion has arisen that an offence under this Law has been committed, an inspector may –

(1)investigate any person connected to such offence or who may have information pertaining to such offence; the provisions of sections 2 and 3 of the Criminal Procedure Ordinance (Testimony) shall apply to an investigation under this paragraph, with the necessary modifications;
(2)seize any object connected to such offence; the provisions of Chapter IV of the Criminal Procedure Ordinance (Arrest and Search) [New Version], 5729-1969 (in this section – the Arrest and Search Ordinance) shall apply to a seizure under this paragraph, with the necessary modifications;
(3)apply to a court for a search warrant pursuant to section 23 of the Arrest and Search Ordinance, and execute such warrant; the provisions of sections 24(a)(1), 26 to 28 and 45 of the Arrest and Search Ordinance shall apply to a search under this paragraph, with the necessary modifications.

Conditions for the Exercise of Powers§

27.
(a)A supervisor or inspector shall not make use of the powers vested in the supervisor or inspector under this Chapter, except while fulfilling the supervisor's or inspector's function and if the supervisor or inspector holds a certificate signed by the Administrator, attesting to the supervisor's or inspector's function and powers, which the supervisor or inspector shall present upon request.
(b)The Administrator's powers under this Chapter are not delegable.

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Chapter VI: Miscellaneous Provisions

Holding of Electronic Payment Instruments§

28.

For the purpose of increasing the scope of the use of electronic payment instruments, the Minister of Finance may, with the approval of the Finance Committee of the Knesset, prescribe rules obligating dealers, generally or by categories of dealers, excluding an exempt dealer as defined in the Value Added Tax Law, to hold a dedicated device used for reading charge cards or for processing another electronic payment instrument, provided that dealers shall not be required to hold more than one dedicated device.

Obligation to Document Payment Instruments§

29.
(a)A dealer shall document the payment instrument by means of which the dealer made a payment or received a receipt.
(b)The Administrator may prescribe, within the framework of bookkeeping directives pursuant to section 130 of the Income Tax Ordinance [New Version], provisions concerning the manner of documentation of the payment instrument under subsection (a), including by means of retaining documents evidencing the payment instrument.

Obligation to Declare Payment Instruments in Respect of Rights in Real Property§

30.
(a)A purchaser of rights in real property who is required to submit a declaration pursuant to section 73 of the Real Property Taxation Law shall include in that declaration one of the following:
(1)particulars concerning the payment instrument by which the consideration is given, together with supporting documents, all as the Administrator shall direct;
(2)a declaration that at the time of making the declaration the particulars of the payment instrument are not known to the purchaser.
(b)The Administrator shall not grant approval pursuant to section 16(a)(2) of the Real Property Taxation Law if the conditions referred to in subsection (a) have not been fulfilled.
(c)A purchaser of a right in real property who has declared that the particulars of the payment instrument are not known to the purchaser, as referred to in subsection (a)(2), shall report to the Administrator the particulars of the payment instrument as referred to in subsection (a)(1), within six months from the date on which possession of the real property was delivered to the purchaser or was placed at the purchaser's disposal.

Confidentiality§

31.

A person shall not disclose information that has come to the person's knowledge in the course of implementing this Law; the provisions of section 142(a), (a1) and (b) of the Value Added Tax Law shall apply for this purpose, with the necessary modifications.

Implementation and Regulations§

32.
(a)The Minister of Finance is charged with the implementation of this Law, and may, with the consent of the Minister of Justice and the Governor of the Bank of Israel and with the approval of the Constitution Committee, make Regulations for its implementation.
(b)The first Regulations under section 11 shall be brought for the approval of the Constitution Committee within three months from the commencement date.

Amendment of the First Schedule§

33.
(a)From the 4th of Tevet 5780 (1 January 2020), and annually thereafter, the Minister of Finance shall examine the amendment of the First Schedule as referred to in subsection (b).
(b)From the 4th of Tevet 5780 (1 January 2020), the Minister of Finance may, by Order, with the consent of the Minister of Justice and the Governor of the Bank of Israel and with the approval of the Constitution Committee, amend the First Schedule and prescribe therein that –
(1)the amount specified in item (1) shall be NIS 6,000, and in respect of the application of this amendment to wages – also with the consent of the Minister of Economy and Industry;
(2)the amount specified in item (2) shall be NIS 15,000, except in respect of an amount paid by a person who is not a dealer for the purchase of a motor vehicle, which shall remain NIS 50,000.

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Chapter VII: Consequential Amendments

Amendment of the Wage Protection Law – No. 30§

34.

In the Wage Protection Law, 5718-1958, in section 2, at the end thereof the following shall be inserted: "Nothing in the provisions of this subsection shall derogate from the prohibitions prescribed in sections 2 and 4 of the Law for the Reduction of the Use of Cash, 5778-2018."

Amendment of the Real Property Taxation (Appreciation and Acquisition) Law – No. 92§

35.

In the Real Property Taxation (Appreciation and Acquisition) Law, 5723-1963, in section 73(c), after paragraph (6) the following shall be inserted:

"(7) particulars as referred to in section 30 of the Law for the Reduction of the Use of Cash, 5778-2018".

Amendment of the Execution Law – No. 59§

36.

In the Execution Law, 5727-1967 –

(1)in section 1, after the definition "Interest and Linkage Law" the following shall be inserted:

"'charge card' and 'payment card' – as defined in the Charge Cards Law, 5746-1986;

'immediate charge card' – a plate or other reusable object intended for the purchase of assets from a supplier, with immediate payment of the consideration by the customer, excluding a payment card;";

(2)in section 66a(4)(a), the words "within its meaning in the Charge Cards Law, 5746-1986" shall be deleted;
(3)in section 66a1 –
(a)in subsection (a), in the opening passage, instead of "on a charge card as defined in the Charge Cards Law, 5746-1986" there shall come "on an immediate charge card on which transactions can only be made against a credit balance, or on a charge card";
(b)in subsection (b), after "by means of" there shall come "an immediate charge card or";
(4)in section 69d(a)(3) the words "within its meaning in the Charge Cards Law, 5746-1986" shall be deleted;
(5)in section 81a, at the end thereof the following shall be inserted:

"(g) (1) An application for the execution of a bill that is a cheque which is prohibited from being honoured pursuant to section 5 of the Law for the Reduction of the Use of Cash, 5778-2018, shall not be submitted unless the provisions of section 81a1(b1) and (b2) in respect of a claim for a liquidated amount have been complied with, with the necessary modifications; the provisions of section 81a1(c) shall apply to such an application for execution, with the necessary modifications.

(2)The Minister of Justice may prescribe additional provisions in respect of an application for the execution of a bill as referred to in paragraph (1)."

Amendment of the Administrative Offences Law – No. 24§

37.

In the Administrative Offences Law, 5746-1985, in the First Schedule, in column A, at the end thereof the following shall be inserted: "Law for the Reduction of the Use of Cash, 5778-2018.

Amendment of the Fines, Fees and Costs Collection Authority Law – No. 18§

38.

In the Fines, Fees and Costs Collection Authority Law, 5755-1995, in section 7b –

(1)in subsection (a), instead of "on a debit card as defined in the Debit Cards Law, 5746-1986" shall come "on an immediate debit card as defined in the Execution Law, 5727-1967, by which transactions may be effected against a credit balance only, or on a debit card as defined in that Law";
(2)in subsection (b), after "by means of" shall come "an immediate debit card or".

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Chapter VIII: Commencement, Application, Transitional Provision and Temporary Provisions

Commencement and Limitations on Application§

39.
(a)This Law shall commence on the 29th of Tevet 5779 (1 January 2019).
(b)Notwithstanding the provisions of subsection (a), sections 5 and 6(b) and the Second Schedule, as well as section 81a(g) of the Execution Law as worded in this Law, shall commence on the 28th of Sivan 5779 (1 July 2019).
(c)The provisions of this Law shall not apply –
(1)to loan agreements and transactions, except for ongoing transactions for the receipt of a service or the sale of a lease right, that were concluded on the eve of the commencement date;
(2)to cheques deposited in custody with a banking corporation, the Postal Bank or a holder of a licence to provide deposit and credit services, on the eve of the late commencement date.

Transitional Provision§

40.

Notwithstanding the provisions of sections 6 and 20, during the nine months from the commencement date or from the late commencement date, as the case may be, no financial sanction or fine shall be imposed for a breach of a provision under this Law, unless the violator has received a written warning regarding the breach and has again breached the same provision.

Temporary Provision Regarding a Person Whose Occupation Is the Provision of Non-Interest-Bearing Credit§

41.

Until the date of commencement of the Law for the Regulation of the Provision of Deposit and Credit Services without Interest by Free-Loan Institutions, 5779-2019, and if its commencement is deferred pursuant to section 109(c) of that Law, the period shall be deferred accordingly, the provisions of section 2 shall not apply to a person whose occupation is the provision of non-interest-bearing credit to an individual or to another person whose occupation is the provision of credit as aforesaid – in respect of that person's said occupation with regard to acts of donation, loan or gift; in this section –

"interest" – as defined in section 25a of the Supervised Financial Services Law;

"the Regulating Law" – (deleted)

Temporary Provision Regarding the Use of Cash in Transactions with Residents of the Area or Residents of the Palestinian Authority§

42.
(a)During a period of three years from the commencement date (hereinafter – the temporary provision period), the provisions of section 2 shall not apply to the following:
(1)a resident of the Area or a resident of the territories of the Palestinian Authority who are not Israeli citizens; in this section, "the Area", "territories of the Palestinian Authority" and "Israeli citizen" – as defined in section 11l1 of the Anti-Money Laundering Law as worded in this Law;
(2)an Israeli citizen who gives a cash payment as provided in section 2 to a resident of the Area or a resident of the territories of the Palestinian Authority who are not Israeli citizens, and an Israeli citizen who receives a cash payment as provided in that section from a resident of the Area or a resident of the territories of the Palestinian Authority who are not Israeli citizens.
(b)The Minister of Finance, with the consent of the Minister of Justice, the Minister of Defence and the Governor of the Bank of Israel and with the approval of the Constitution Committee, may, by Order, extend the temporary provision period for additional periods not exceeding in aggregate three years, on the basis of reasons and data that the Minister of Finance shall bring before the Committee; in such an Order, the Minister of Finance may reduce the amounts specified in section 11l1 of the Anti-Money Laundering Law, as worded in this Law.

Amendment of the Anti-Money Laundering Law – No. 28 – Temporary Provision§

43.

(Consequential amendment to the Prohibition on Money Laundering Law, 5760-2000)

Report to the Knesset§

44.
(a)The Administrator shall report in writing, annually, during the four years from the end of one year from the commencement date, to the Constitution Committee, on the following matters relating to the Administrator's area of responsibility:
(1)the number of financial sanctions imposed pursuant to section 6, the amounts imposed and how many of them were collected;
(2)the number of fines imposed pursuant to section 20, the amounts imposed and how many of them were collected;
(3)the number of warnings sent pursuant to section 40.
(b)The Supervisor of Banks, the Supervisor as defined in the Postal Law and the Supervisor as defined in the Supervised Financial Services Law shall report in writing, annually during the four years from the end of the late commencement date, to the Constitution Committee, on the matters listed in paragraphs (1) to (3) of subsection (a), relating to their respective areas of responsibility, as well as on the rate of cheques not honoured by a banking corporation, the Postal Bank and a holder of a licence to provide deposit and credit services, as the case may be, and on the grounds for non-payment.

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