Israeli Tax Authority Demands Yeshivas Certify Students’ Military Status to Retain Donation Tax Benefits

Following guidance from the Attorney General, the Israeli Tax Authority has sent notices to dozens of yeshivas requiring their heads, administrators, and authorized signatories to sign a declaration confirming that none of their students have unresolved military service status. This declaration is a condition for maintaining eligibility for Section 46 tax benefits on donations. Section 46 allows donors to deduct contributions to approved organizations from their taxable income, a key mechanism for fundraising.

The directive stems from legal consultations and rulings that prohibit indirect funding, including tax credits for donations, to religious institutions that enroll students who have not regularized their status with the military authorities. The declaration must affirm that the institution does not admit students who have been called for military service under the Security Service Law but have not complied with legal requirements.

Additionally, yeshivas must submit an Excel file listing all students enrolled for the academic year for which the approval is sought, including their names and ID numbers. Failure to sign the declaration and provide the detailed student list risks losing the Section 46 tax benefit, which could significantly impact fundraising efforts for these institutions.