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Special Payment Law for the Achievement of Budget Targets (Temporary Provision – Swords of Iron), 5784-2024

חוק תשלום מיוחד לשם השגת יעדי התקציב (הוראת שעה – חרבות ברזל), תשפ"ד-2024

Published: 2024-03-17Consolidated Hebrew text as of 2026-04-05 · 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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Definitions§

1.

In this Law –

"bank" – as defined in the Banking (Licensing) Law;

"bank with a small scale of activity" – a bank whose asset value is less than 5% of the asset value of all banks in Israel; for this purpose, "asset value", of a bank – the value of the bank's assets as appearing in the bank's balance sheet in the last annual financial report prepared on a consolidated basis in accordance with the generally accepted accounting principles applicable to it, together with the asset value as aforesaid of a bank that controls it, provided that the same asset shall not be counted more than once in that asset value;

"the Ordinance" – the Income Tax Ordinance [New Version];

"Banking (Licensing) Law" – the Banking (Licensing) Law, 5741-1981;

"Value Added Tax Law" – the Value Added Tax Law, 5736-1975;

"activity in Israel" – as defined in the Value Added Tax Law;

"profit" – as defined in the Value Added Tax Law;

"Bank of Israel interest rate" – the interest rate determined by the Bank of Israel in its periodic monetary decisions, used by it for the purpose of extending loans to banking corporations or for the purpose of receiving loans from them;

"wage" – as defined in section 4(b) of the Value Added Tax Law;

"control" and "banking corporation" – as defined in the Banking (Licensing) Law;

"the first determining period (Swords of Iron)" – the period from the commencement of this Law until the 11th of Tevet 5786 (31 December 2025);

"the second determining period" – the period from the 14th of Nisan 5786 (1 April 2026) until the 1st of Tevet 5788 (31 December 2027).

Special Payment for the Achievement of Budget Targets on the Activity of a Bank that is not a Bank with a Small Scale of Activity – Temporary Provision§

2.
(a)A bank that is not a bank with a small scale of activity (in this Section – paying bank) shall pay to the State Treasury in respect of the first determining period (Swords of Iron) an annual payment in an amount equal to 6% of the profit it derived from its activity in Israel (in this Section – the annual payment amount).
(a1)A paying bank shall pay to the State Treasury in respect of the second determining period –
(1)in 2026 – a payment in an amount equal to 12% of the profit it derived from its activity in Israel (in this Section – the annual payment amount for 2026);
(2)in 2027 – a payment in an amount equal to 0.5% of the profit it derived from its activity in Israel (in this Section – the annual payment amount for 2027).
(b)Notwithstanding the provisions of subsection (a), if the annual payment amount of all the paying banks in respect of the year 2024 exceeds the sum of NIS 1.2 billion (hereinafter – the maximum amount for 2024) or if the annual payment amount of all the paying banks in respect of the year 2025 exceeds the sum of NIS 1.3 billion (hereinafter – the maximum amount for 2025), the difference between the annual payment amount of all the paying banks and the maximum amount for 2024 or the maximum amount for 2025, as the case may be, multiplied by the proportionate share of that paying bank in the annual payment of all the paying banks, shall be refunded to the paying bank; in this subsection, "annual payment amount" – for the purpose of the said refund only, the annual payment amount as defined in subsection (a) in accordance with the report submitted by a paying bank under section 131 of the Ordinance in respect of tax year 2024 or 2025, as the case may be, and the said report shall be deemed as though it were approved under section 145(a)(2)(a) of the Ordinance.
(b1)Notwithstanding the provisions of subsection (a1), if the annual payment amount for 2026 of all the paying banks exceeds the sum of NIS 3 billion (hereinafter – the maximum amount for 2026) or if the annual payment amount for 2027 of all the paying banks exceeds the sum of NIS 0.125 billion (hereinafter – the maximum amount for 2027), the difference between the annual payment amount of all the paying banks and the maximum amount for 2026 or the maximum amount for 2027, as the case may be, multiplied by the proportionate share of that paying bank in the annual payment of all the paying banks, shall be refunded to the paying bank; in this subsection, "annual payment amount for 2026" and "annual payment amount for 2027" – for the purpose of the said refund only, the annual payment amount for 2026 or the annual payment amount for 2027, as the case may be, as defined in subsection (a1) in accordance with the report submitted by a paying bank under section 131 of the Ordinance in respect of tax year 2026 or 2027, as the case may be, and the said report shall be deemed as though it were approved under section 145(a)(2)(a) of the Ordinance.
(c)In tax year 2024, this Section shall apply in respect of the proportionate share of the profit in that tax year.
(c1)In tax year 2026, this Section shall apply in respect of the proportionate share of the profit in that tax year.
(d)The Minister of Finance, with the approval of the Finance Committee of the Knesset, may, by Order to be made no later than the 29th of Tishrei 5785 (31 October 2024), shorten the first determining period (Swords of Iron) until the 30th of Kislev 5785 (31 December 2024), if satisfied that a material change has occurred in the expected macroeconomic conditions for the year 2025 as compared with the macroeconomic conditions that were expected for that year on the eve of the commencement of this Law, including in the Bank of Israel interest rate, the rate of inflation or the rate of unemployment from the labour force, in a manner that is likely to significantly impair the banks' ability to derive profits in 2025.
(e)During the first determining period (Swords of Iron), notwithstanding the provisions of section 4(b) preamble of the Value Added Tax Law, the rate of tax that a paying bank shall pay under that section on its activity in Israel in 2025 shall be 17% of the wage it paid and the profit it derived; however, if the Minister of Finance has made an Order under subsection (d), the rate of tax that a paying bank shall pay on the wage it paid and the profit it derived from its activity in Israel in 2025, under section 4(b) preamble of the Value Added Tax Law, shall apply accordingly.
(f)The provisions of the Value Added Tax Law shall apply to a payment under this Section, including the provisions of section 4(b) of that Law and the provisions relating to reporting, assessment, payment, collection and penalties, unless otherwise provided in respect of a particular matter under this Law.
(g)Notwithstanding the provisions of subsection (f), a payment under this Section shall not be allowed as a deduction under the Ordinance.

Report to the Knesset§

3.

The Supervisor of Banks as defined in the Banking Ordinance, 1941, shall report to the Finance Committee of the Knesset, during the first determining period (Swords of Iron), on a semi-annual basis, no later than 30 June and 31 December of each year, on, inter alia, the interest rates for the extension of credit and the interest rates for deposits and on the commissions charged by banks from customers after the commencement of this Law, in comparison with the interest rates and commissions that were charged or paid on the eve of the commencement of this Law and with the interest rates and commissions in respect of which a report was submitted under this Section, all broken down, inter alia, by types of customers, periods and types of interest.

Implementation§

4.

The Minister of Finance is charged with the implementation of this Law.

Commencement§

5.

This Law shall commence on the 22nd of Adar Bet 5784 (1 April 2024).

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