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Section 46

Understanding Section 46 of the Income Tax Ordinance is vital for non-profit organizations seeking to maximize their fundraising potential. This section allows individuals and corporations to receive a tax credit for donations made to eligible non-profits. Individuals can claim a credit of 35% of the tax, and companies receive a credit at the corporate tax rate.

However, obtaining Section 46 status involves a complex process. Non-profits must undergo scrutiny by the Tax Authority and meet several conditions, including being a legally registered entity, maintaining proper records with the VAT and Income Tax departments, having no income tax debts, and having an accountant-approved bookkeeping system. The final approval comes from the Finance Committee of the Knesset.

Our office specializes in assisting non-profits with this process. We provide comprehensive support, from preparing and submitting the required documents to liaising with the Tax Authority. Our expertise allows you to focus on your core tasks while we handle the regulatory aspects. Achieving approval under Section 46 not only offers tax benefits to donors but also enhances the credibility of the non-profit in the eyes of potential donors.

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