Expected legislative changes to Israel's nonprofit sector in 2017

The Knesset is expected to pass significant third-sector legislation this year.

Most significantly, the Knesset is expected to promote a new Law to Promote Specified Nonprofit Activities (NPO law). This law will consist of a comprehensive regulatory framework to impose increased transparency on NGOs (associations/NPOs and public-benefit companies) regarding their activities, especially when the majority of funding is from donations from ‘Foreign Political Entities’. NGOs will have to provide detailed information regarding their corporate governance, relation to their funding sources, its scope of activities, and mode of operation. The law will also prescribe supervisory and enforcement arrangements customized for the different types of NGOs.

Furthermore, the Frisch Committee report and its recommendations concerning making amendments to the tax benefit clause (section 46) of the Income Tax Law are expected to be included in the new legislation. The Israeli Tax Authority is also expected to recommend certain technical-procedural aspects for ascertaining eligibility for the tax benefit clause.

To find out what these legislative changes mean for your nonprofit, please contact us.