As part of the assistance program for businesses affected by the Corona restrictions, a fixed expenditure grant was determined by the Tax Authority. This grant was based on the total fixed expenses of the businesses, including rental expenses, property taxes, employees who did not go to the IDF, etc.
In the fixed expenses grant, restrictions were set on the amount of the grant and the scope of the fixed expenses for which the grant was given, depending on the level of turnover of the business. Thus, in November 2021 the government approved a supplementary grant for businesses whose rental expenses are unusually high relative to the turnover. We recently updated the terms so that more businesses can benefit from the grant.
The government decision of November 2020 stipulated that the completion of the grant for businesses would be given to businesses whose rental expenses exceed 17% of turnover, and that in 2020 these expenses were similar (90% at least) to rental expenses paid by the business in 2019. The grant will be given to businesses eligible for at least 3 grants From the tax authority and their injury rate was at least 80%.
The amount of the grant is NIS 100 per meter (as stated in the property tax bill and subject to a lease agreement), and up to NIS 120,000 per business, but the total grants received from the Tax Authority and the lease grant will not exceed the maximum grant for fixed expenses.
The option to apply for a rental expense grant, which opened in January, is now reopening in favor of businesses and after a number of further updates the government decided on last month.
Updates released by the Ministry of Economy:
• The volume of rental expenses paid by the dealer by 2020 will not be less than 80% of the volume of rental expenses he paid in 2019 (instead of 90% before the amendment).
• Adding another period, January-February 2021 or March-April 2021, to examine the period in which the dealer had a turnover decrease of more than 80%. So now 80% damage should be shown in 3 out of 6 periods (instead of 3 out of 5, before the repair).
• It was also possible to include rental expenses spread over a later period (but the amount of the grant will not exceed the amount actually paid). This is due to the fact that in many cases in view of the economic difficulty encountered by businesses, the rental expenses paid by dealers up to the year 2020 have been spread over several years. In addition, businesses that have withheld the payments will be able to apply for a supplement to the grant, depending on the actual rental payment, for about five years.
• It was possible to recognize some of the management fees paid by the business as rental expenses. This is because it has become clear that there are cases where the division of payment between rent and management fees is made in accordance with accounting considerations and it does not actually reflect the consideration for the service received.
The grant is operated by the Small and Medium Business Agency, as part of the assistance programs for businesses affected by the corona, including a tax deduction and a retention grant. Submission of the grant is now open on the Small and Medium Business Agency website
The Minister of Economy and Industry, Orna Barbibai, said: “The rental expenditure grant was approved by the government as part of the assistance program for businesses affected by the corona as an additional grant layer for exceptional businesses. We are attentive to businesses and their difficulties, and following the referrals of the businesses, we have adjusted the terms of the grant and expanded the scope of businesses that will be eligible for the grant. ”
Ran Koiti, director of the Small and Medium Business Agency, said: “The Small and Medium Business Agency is attentive at all times to voices coming from the field. When we recognized that there were barriers preventing businesses for which the grant was intended to be received, we acted as quickly as possible, together with the Ministry of Finance, to amend the government decision and expand the circle of eligible businesses. ”
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