Israel Launches Pilot Program for Business Owners Affected by Extortion

The Israel Tax Authority has initiated a pilot program offering compensation to business owners whose property was damaged due to extortion-related activities. The program, established under government resolution No. 4299, covers damages incurred between September 24 and November 23, 2026. Eligible damages include harm to equipment, inventory, business premises, and in some cases, residential properties.

This initiative is designed for business owners who cannot secure reimbursement through their insurance companies. A key requirement is filing an official police report that is recognized as being linked to extortionate "sponsorship fees." Applicants must also demonstrate that they have exhausted all avenues for insurance claims, whether due to denial of payment or lack of coverage for intentional damage despite prior insurance.

Businesses must operate legally, possess a valid license, and be registered with the tax authorities to qualify. For building damage, proof of legal construction is also necessary. The compensation amount is based on assessed direct damages, with a maximum payout of up to 2 million shekels.

Indirect financial losses, such as lost workdays or damages to third parties, are not covered. Business owners have a strict seven-day window from the date of damage to submit their application and supporting documents through the Tax Authority's Compensation Fund online system. The review process may take up to eight months.

Crucially, damaged property must not be repaired before an official assessment by a tax authority appraiser, unless the repairs are for immediate safety reasons, like clearing debris. Failure to comply with this rule could jeopardize the claim.