Thank you to Caspy & Caspy C.P.A for authoring this article
May 3, 2020
Assistance Grant for Businesses for Participating in Fixed Expenses due to Corona
Below is the outline that was approved for a grant to businesses for fixed expenses:
The subject is complex and therefore we recommend that you receive professional guidance, as needed, for a better understanding of eligibility and the amount of the grant.
A not-for-profit organization is eligible for the grant, when at least one-third of its revenues are from the sale of services or products.
We emphasize that there is no connection between the grant for the self-employed and the grant for businesses, and it is possible to receive both of them. The application must be filed by the beginning of August 2020, and it will be possible to file in an online form beginning May 12, 2020.
Conditions for eligibility:
1. Revenues turnover in March and April 2020 decreased by more than 25% compared with March and April 2019.
2. For a company – turnover in Year 2019 exceeded NIS 18,000 and does not exceed NIS 20 million; for a self-employed person – exceeded NIS 300,000.
3. The business’ books of account are legally acceptable.
4. Periodic reports were filed with the VAT Authority in 2019.
The maximum ceiling of the grant is NIS 400,000. The grant amount depends on several factors:
1. The amount and percentage of the decrease in turnover in the months March-April 2020 as compared with the same months in 2019.
2. Transactions turnover reported for the Year 2019.
3. Current inputs reported to VAT in Year 2019.
4. The amount of salary expenses saved by the business, according to a calculation of the average monthly salary liable for National Insurance for the prior 3 months, for employees who were terminated or placed on unpaid leave, multiplied by 1.25 and divided by the number of months the employees will be on unpaid leave.
The amount of the grant according to levels of revenue turnover:
1. From NIS 18,000 to NIS 300,000, the grant amount will be:
A. NIS 700 to companies with turnover of up to NIS 100,000.
B. NIS 1,875 for companies with turnover of up to NIS 200,000.
C. NIS 3,025 for companies with turnover of up to NIS 300,000.
2. From NIS 300,000 to NIS 1,500,000, the grant amount will be:
A. A decrease of between 25% and 40% of turnover – a grant equal to 3% of turnover.
B. A decrease of between 40% and 60% of turnover – a grant equal to 6% of turnover.
C. A decrease of between 60% and 80% of turnover – a grant equal to 10.5% of turnover.
D. A decrease of more than 80% of turnover – a grant equal to 15% of turnover.
3. For companies and the self-employed with turnover of between NIS 1,500,000 and up to NIS 20,000,000:
A. The grant amount will be calculated by multiplying the turnover in the months of March-April 2019 by the fixed expense participation coefficient (as detailed in Par. C below) and the multiplication coefficient (as will be detailed in Par. B. below).
B. The multiplication coefficients are:
1. A decrease of between 25% and 40% of turnover – a grant coefficient of 10% of turnover.
2. A decrease of between 40% and 60% of turnover – a grant coefficient of 20% of turnover.
3. A decrease of between 60% and 80% of turnover – a grant coefficient of 35% of turnover.
4. A decrease of more than 80% of turnover – a grant coefficient of 50% of turnover.
C. The fixed expense participation coefficient will be determined according to the following formula (in any case, the participation coefficient is limited to a ceiling of 30%):
Fixed expense participation coefficient = [ Saved salary expenses +90%X ( Current inputs (except equipment) 2019 ) ] -1
2019 turnover 2019 turnover
D. In this case, the Finance Ministry chose to increase the amount of the grant according to the business efficiency expressed in the percentage of current inputs that are lower than turnover, and in the continued employment of workers.
The list below summarizes the conditions:
Turnover amount: NIS 18,000-300,000
Calculation method: Fixed grant
Grant amount: Between NIS 700-3,025
Turnover amount: NIS 300,000-1,500,000
Calculation method: Coefficient determined according to the turnover decrease multiplied by 30%
Grant Amount: 3-15% of turnover
Turnover amount: NIS 1,500,500 – 20,000,000
Calculation method: Coefficient determined according to the decrease in turnover multiplied by a fixed expense participation coefficient
Grant Amount: 3-15% of turnover
Caspy & Caspy C.P.A was funded in 1965, and has been servicing clients for over 55 consecutive years. The firm is located in Jerusalem and operates throughout Israel. The firm provides a wide range of services to individuals, business entities in all sectors of the economy, non- profit organizations and government bodies under the management of C.P.A Eitan Caspy. The firm includes a U.S tax department for individuals, companies and nonprofit organizations. You can reach the firm by phone at 02-6796606 or you can email them at email@example.com. Please visit their website at https://caspy.co.il/home-en for more information.