Israel is moving to require online reporting for charitable donations in order to qualify for tax breaks, a shift that officials say will improve transparency and reduce fraud. The move, announced this week, impacts all organizations seeking to provide donation receipts eligible for tax deductions.
The recent regulations require charities to utilize an approved digital platform for issuing donation confirmations. The Israel Tax Authority (ITA) has not yet specified which platforms will be approved, but stated that a list will be published shortly. The change is intended to streamline the process for both donors and the tax authority, and to combat the submission of false or inflated donation claims.
While the ITA has emphasized the benefits of increased transparency, some charities have expressed concern about the potential impact on smaller organizations and donors who may lack access to technology or prefer traditional methods of giving. The ITA has indicated it will provide guidance and support to charities during the transition period.
The shift in Israel comes as governments worldwide are increasingly focused on tightening regulations surrounding charitable giving and tax deductions. In Canada, recent federal budget measures included selected tax changes, according to Fasken law firm, though details remain focused on broader economic policy. Similarly, the United States Internal Revenue Service recently concluded that state carbon offset credits are includable in income, clarifying a previously ambiguous area of tax law.
The move also coincides with broader international efforts to address tax avoidance and ensure fair revenue collection. PwC recently reported on draft legislation aimed at amending Pillar Two rules and integrating foreign affiliate regimes, signaling a global trend toward greater tax compliance and transparency. The ITA has not indicated whether the new charity reporting requirements are directly linked to these international initiatives, but the timing suggests a shared focus on strengthening tax systems.
The ITA has scheduled a series of informational sessions for charities to explain the new requirements and address concerns. The deadline for full implementation of the online reporting system is currently set for the end of 2026, though this may be subject to change based on feedback from the charitable sector.
