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Local Authorities (Interest and Linkage Differentials on Compulsory Payments) Law, 5740-1980

חוק הרשויות המקומיות (ריבית והפרשי הצמדה על תשלומי חובה), תש"ם-1980

Published: 1980-01-17Consolidated Hebrew text as of 2025-01-01 · Last amended 2024-07-04✓ 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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Definitions§

1.

In this Law –

"local authority" – a municipality, local council, local committee or association of towns;

"compulsory payment" – any payment due to a local authority under law, including payment quotas imposed by an association of towns on the local authorities within its area and including taxes and payment quotas imposed by a regional council on a local committee;

"index" – the Consumer Price Index published from time to time by the Central Bureau of Statistics;

"determining day" – the first day of the month in each of the months of the year;

"linkage differentials" –

(1)in relation to general property tax paid pursuant to a payment arrangement – the updating of the property tax in accordance with the rate of change of the index, from the index published in the month of November preceding the date of assessment to the index preceding the index published shortly before the date of payment;
(2)in relation to general property tax paid in arrears – the updating of the property tax in accordance with the rate of change of the index, from the index published shortly before the date of assessment to the index published shortly before the date of payment;
(3)in relation to any other compulsory payment – the updating of the compulsory payment in accordance with the rate of change of the index, from the index published shortly before the date of assessment to the index published shortly before the determining day preceding the date of discharge of the compulsory payment;

"arrears payments" – linked interest at the rate of 0.5% per month, or at such other rate as the Minister of the Interior and the Minister of Finance shall prescribe, from the date of assessment of the compulsory payment until the date of its discharge, with the addition or deduction of linkage differentials.

Arrears Payments§

2.
(a)A compulsory payment that has not been paid within 30 days of the date fixed for its discharge shall be paid with the addition of arrears payments.
(b)Where a legislative provision stipulates that a compulsory payment shall be paid within a fixed period and it has not been paid within 30 days of the day on which that period ended, the first day of the period shall be deemed to be the date of assessment of that compulsory payment for the purpose of adding arrears payments thereto.

Appropriation of Payments§

3.

A sum paid in settlement of various debts owed by a person to a local authority shall first be appropriated against the compulsory payment whose date of assessment is the earliest among that person's debts, with the addition of the arrears payments applicable thereto; if the sum given is insufficient to discharge that compulsory payment and the arrears payments applicable thereto, a portion equal to the ratio between the sum paid and the total of the compulsory payment and the arrears payments applicable thereto shall be deducted from the compulsory payment, and when the balance of the compulsory payment is paid, arrears payments shall be calculated thereon from the original date of assessment.

Payment Arrangement§

4.
(a)A local authority may establish, for general property tax and business tax, an arrangement for their repayment in instalments (hereinafter – payment arrangement), over a period not exceeding one year from the date of assessment thereof; each payment pursuant to such an arrangement shall be paid with the addition of linkage differentials.

(aa) A payment pursuant to a payment arrangement under subsection (a) that has not been paid within 30 days of the date fixed for its discharge shall be paid with the addition of arrears payments.

(b)A local authority may establish, for the compulsory payments listed in the Schedule, a payment arrangement for a period not exceeding two years, the basic amount of which shall be determined as provided in subsection (c); each payment pursuant to such an arrangement shall be paid with the addition of interest at the rate of 18% per annum, or with the addition of interest at such other rate as the Minister of the Interior and the Minister of Finance shall prescribe, all from the date of the arrangement until the actual date of payment.
(c)A payment arrangement under subsection (b) shall be made in respect of the compulsory payment, with the addition of arrears payments, for the calculation of which the day of the arrangement shall be deemed to be the day of payment.
(d)A payment arrangement under subsection (b) shall not be made in respect of a compulsory payment that a person is required to pay by reason of construction for which a permit was granted and the area of which exceeds 40 square metres.
(e)If a person fails to pay on time two instalments pursuant to a payment arrangement made with him, the arrangement shall be cancelled and section 2 shall apply to the balance of the compulsory payment.
(f)The Minister of the Interior, with the approval of the Interior and Environmental Quality Committee of the Knesset, may by Order amend the Schedule.

Authority to Prescribe Determining Days§

5.

The Minister of the Interior may by Order prescribe, for a particular local authority or for a class of local authorities, determining days other than as defined in section 1.

Refund of Overpayments§

6.
(a)Where a person has paid a compulsory payment that he was not liable to pay or has paid in excess of the amount he was liable to pay (hereinafter – overpayment) and the overpayment has not been refunded within 30 days of the date of its discharge, the local authority shall refund it with the addition of differentials at the rate of increase of the index from the index published shortly before the date of discharge of the overpayment to the index published shortly before the determining day preceding the date of its refund; if the overpayment has not been refunded within 30 days of the date on which the person who paid it gave written notice to the local authority that the payment collected from him is an overpayment, the local authority shall refund it with the addition of differentials at the rate of increase of the index as aforesaid and with the addition of linked interest at the rate of 0.5% per month from the date of discharge of the overpayment until the date of its refund.
(b)Without derogating from the provisions of subsection (a), where a person who was the owner or occupier of a property in respect of which he is liable for general property tax has given written notice to the local authority that he has ceased to be such owner or occupier, the local authority shall refund any overpayment paid by that person within 30 days of the date of delivery of the notice; where such notice has been given, it shall be deemed as if written notice as referred to in subsection (a) had also been given upon the expiry of 10 days from the date of delivery of the notice referred to in this subsection.
(c)The provisions of subsection (b) shall not apply if, at the time of delivery of the notice referred to in that subsection, the local authority requested from the person delivering the notice particulars as to the manner in which he wishes the overpayment, if any, to be refunded to him, and the person delivering the notice did not supply such particulars to the local authority; however, if the local authority holds particulars enabling it to refund the overpayment to the person delivering the notice, the local authority shall refund the payment to him even if he did not supply particulars as referred to in this subsection.
(d)A local authority may prescribe a form for the text of the notice for the purposes of subsections (b) and (c), which shall be published on its website.

Collection§

7.

For the purposes of collection, interest and linkage differentials under this Law shall have the same status as the compulsory payment in respect of which they are collected.

Rounding of amounts§

7a.

Any compulsory payment or overpayment to which differentials have been added in accordance with the rate of increase of the index as provided in this Law shall be rounded to the nearest NIS 10; an amount of NIS 5 shall be rounded downwards.

Amendment of the Interest Law (Change of Rates)§

8.

In the Interest Law (Change of Rates), 5733-1972 –

(1)in the First Schedule, after paragraph 12, the following shall be inserted:

"(13) sections 1, 4, 6 and 13 of the Local Authorities (Interest and Linkage Differentials on Compulsory Payments) Law, 5740-1980.";

(2)in the Second Schedule, paragraph (9) – is repealed.

Amendment of the Municipalities Ordinance§

9.

Section 253 and sections 301 to 304 of the Municipalities Ordinance – are repealed.

Amendment of the Local Councils Ordinance§

10.

Section 20 of the Local Councils Ordinance – is repealed.

Amendment of the Local Authorities (Sewerage) Law§

11.

Section 36 of the Local Authorities (Sewerage) Law, 5722-1962 – is repealed.

Application to the State§

12.

This Law shall apply to compulsory payments that the State is liable to pay to a local authority as owner of properties within its area or as occupier thereof.

Implementation and Regulations§

13.

The Minister of the Interior is charged with the implementation of this Law and may make Regulations in all matters relating to its implementation.

Transitional Provisions§

14.
(a)Where the date of assessment for the discharge of a compulsory payment fell before the commencement of this Law (hereinafter – the commencement day), the date of assessment for its discharge shall be deemed to have fallen on the commencement day and the provisions of this Law shall apply thereto.
(b)Where a person paid an overpayment before the commencement day, the commencement day shall be deemed to be the date of discharge of the overpayment and the provisions of section 6 shall apply.
(c)
(1)Payment arrangements made before the day of publication of this Law (hereinafter – the publication day) shall remain in force and the provisions of this Law shall not apply to them;
(2)Between the publication day and the commencement day, a local authority may establish, for a compulsory payment, a payment arrangement for a period not exceeding two years; each payment pursuant to such an arrangement shall be paid with the addition of interest at the rate of 72% per annum from the date of the arrangement until the actual date of its discharge;
(3)If a person fails to pay on time two instalments pursuant to a payment arrangement made with him under paragraph (2), the arrangement shall be cancelled and subsection (a) shall apply to the balance of the compulsory payment.
(d)The Minister of the Interior may by Order prescribe, for a particular local authority upon its application or for a class of local authorities, a period longer than the two-month period referred to in section 2, provided that the period prescribed by the Minister shall not exceed six months; the effect of such an Order shall be until the end of the 1983 financial year or until an earlier date prescribed by the Minister.

Commencement§

15.

This Law shall commence on the fifteenth day of Nisan 5740 (1 April 1980).

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Schedule (section 4(b))

(1)pipe-laying fee;
(2)sewerage levy;
(3)road fee;
(4)road levy;
(5)owners' contribution for roads;
(6)owners' contribution for pavements;
(7)channelling and drainage fee.

Amended: Kovetz HaTakanot 5740 No. 4157 of 24.8.1980 p. 2280 – Order 5740-1980; commencing 1.9.1980.

Kovetz HaTakanot 5741 No. 4202 of 1.2.1981 p. 425 – Order 5741-1981; commencing 1.2.1981.

Kovetz HaTakanot 5744 No. 4583 of 29.1.1984 p. 855 – Order 5744-1984; commencing 1.2.1984.

Kovetz HaTakanot 5746: No. 4890 of 1.1.1986 p. 373 – Order 5746-1986; commencing 1.1.1986. No. 4920 of 31.3.1986 p. 756 – Order (No. 2) 5746-1986; commencing 1.4.1986.

Kovetz HaTakanot 5747 No. 4976 of 16.10.1986 p. 58 – Order 5747-1986; commencing 1.10.1986.

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LawTax LawAdministrative Law

חוק הרשויות המקומיות (ריבית והפרשי הצמדה על תשלומי חובה), תש"ם-1980

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