The bill to amend the Income-tax ordinance ( to tax donations from foreign state entities) reads that an NPI that “interferes in the internal affairs of the State of Israel” and has received funding from a “foreign state entity” will no longer be considered a “Public benefit Institution” as per the definition in the Income-tax ordinance and as a “Not for Profit” as per the Value Added Tax Law. Moreover, a 65% tax will be levied on funds received from a foreign state entity.
The Bill to Amend the Law of Associations Law (Foreign State Entity Donations), 2024, seeks to impose an 80% tax on donations from foreign state entities, except in exceptional cases. If passed, this bill could undemocratically and unjustly shrink the operational space of human rights organizations that may act in opposition to the government, hindering their activities and potentially eliminating their existence altogether.