Following demonstrations and media coverage about the plight of business owners and the self employed, the Ministry of Finances has come up with new criteria for controlling shareholders who receive a salary and for the self employed.


The conditions of the second phase for the self-employed are the same as for the first phase with the following changes:

➢ Taxable income for tax year 2018 does not exceed NIS 1 million, compared with NIS 240,000 in the first phase.

➢ Minimum income from a business will be NIS 8,568 per year, compared with NIS 240,000 for the first phase.

➢ The spouse’s income limit was abolished; in the first phase there was a limit on the couple’s taxable income up to the amount of NIS 340 thousand.

➢ A decrease in turnover over 25% is measured from 1.3.2020 to 30.6.2020 compared with the parallel period; in the first phase the comparison was made for March and April.

➢ The amount of the grant is equal to 70% of the average monthly income of the business, compared to 65% in the first phase.

➢ The maximum grant limit is NIS 10,500, compared to NIS 6,000 in the first phase.

➢ The formula of 70% of the average business income is valid up to NIS 40,000, compared to NIS 16,000 in the first phase.

➢ For over NIS 40 thousand and up to a maximum of NIS 83.33 thousand, an amount equal to 17.3% will be deducted from the said amount where the average monthly income from a business exceeds NIS 40,000. Compared with a spread of between NIS 16,000 and NIS 20,000 per month, 75% will be deducted from an amount in excess of NIS 16,000.

➢ In the second stage, there is an addition to a small business with turnover up to NIS 300,000 per year as follows:

➢ If the monthly business turnover is between NIS 1,500 and NIS 8,333, it is entitled to  an additional NIS 700.

➢ If the monthly business turnover is between NIS 8,333 to NIS 16,667, it is entitled to an additional NIS 1,875.

➢ If the monthly business turnover is between NIS 16,667 to NIS 25, 000, it is entitled to an additional NIS 3,025.

➢ The grant is taxable (but you will not be required to pay Bituach Leumi on this sum).

➢ Independent new business owner: if the business or operations began in 2019, and if the business or operations in 2018 and suffered losses in that year.

➢ Submitting for the grant by 12.7.2020 compared to 12.6.2020 in the first phase.

➢You can submit for the grant from the 6.5.2020.-12.7.2020.

How to apply for the second stage? The process is exactly the same as with the first stage, to receive instructions, please click on the following link.


The definition of a controlling shareholder is based on the monthly report submitted to the National Insurance Institute as controlling shareholder In a particular company, at least during the period 1.9.2019 to 29.2.2020, and is not entitled to unemployment benefits or an advance for unemployment benefits as stated for their income as a controlling shareholder in that company.   This is for the period of 1.10.2019. to 30.4.2020 and in accordance with Section 6B of the National Insurance Law.


Eligibility conditions for grant to controlling employees are as follows:

➢ Employee with control who in 2019 will be 20 or more years of age.

➢ They were paid at least six months’ salary from 1.9.2019 to 29.2.2020.

➢ They have been a controlling party in the company at least since 1.10.2019 and until the date of filing the claim for a grant.

➢ Taxable income of a controlling shareholder:  The taxable income, either directly or indirectly, for receiving rights in the company, in 2018, does not exceed NIS 1 million. For an employee with a controlling interest in a new close-held corporation (“hevrat me’atim”) *

The taxable income of the controlling shareholder for 2019 does not exceed NIS 1 million.

➢ The controlling owner and their spouse’s taxable income, not from wages from employment, will be regarded as half of that taxable income for each spouse.

➢ The controlling shareholder’s average monthly income exceeds NIS 714.

➢ From 1.3.2020 to 30.6.2020, the turnover of the company from which they received a salary has decreased by over 25% compared with the same period in 2018. The base turnover for the year 2019 for companies that started business or operations after 1.3.2019  will be from the start of business  until 29.2.2020, divided by the number of working months and multiplied by 4.

➢ Company books are up to date.

➢ Financial reports were submitted for 2018, and as regards new close-held corporations: the 2019 report and the periodic reports were submitted to the VAT.

*Close-held corporation (Hevrat me’atim) as defined in Emergency Regulations (New Corona Virus) (Aid Grant for Self-Employed Persons and Employees 2020-Controlled in Few Companies) fulfills one of the following:

1) The company started doing business or operating in 2019;

2) The company started doing business or operating in 2018 and that year the company did not pay income to an employee with a controlling interest in it.


➢ The grant is based on 70% of the monthly average monthly income in 2018. In a new close-held corporation – the calculation will be 70% of the average work income.

➢ There is a maximum limit of up to NIS 10,500 up to a monthly income of NIS 40,000.

➢ Regarding income from NIS 40 thousand to NIS 83.333 thousand, the maximum grant amount of NIS 10,500 will be reduced by an amount equal to 17.3% of the amount in which the monthly work income,  exceeds NIS 40,000.

➢You can submit for the grant from the 6.5.2020-12.7.2020.

To apply for the grant, I would strongly recommend to talk to your accountant first.