Donations and the Section 46 tax credit

A donation to an appropriately approved institution under Israeli Section 46 may give an individual a credit of 35% of the eligible donation, subject to conditions. Section 46 is a legal provision, not one universal application form.

A tax credit reduces calculated tax; a deduction reduces the income used to calculate tax. A 35% credit therefore does not refund the entire donation or promise a grant to someone with no tax liability. Actual eligibility and tax payable matter. Not every charity or payment qualifies. Check the institution’s Section 46 approval and its validity on the donation date through the Tax Authority’s official service. Registration as a nonprofit or proper-management certification is not a substitute for this approval. An annual minimum and ceilings apply, including a limit relative to taxable income. Check the amounts and rules for the relevant tax year. This lesson does not promise that every donation qualifies in full. The exercise assumes all conditions are met and sufficient tax is payable to use the credit. From 2026, approved institutions must report through Israel Donations. Check that the donation appears in your official personal area with the correct donor, amount and year. Keep the receipt or confirmation required for the chosen route; digital reporting may remove the need to present a paper receipt. A listed donation does not mean a refund has already been paid. Depending on circumstances, the route may be an eligible employer arrangement, tax coordination, a refund request for those eligible for the short return (Form 135), or an annual return under the applicable obligations. Do not claim the same donation twice for duplicate credit. Consult current Tax Authority instructions; do not upload receipts or personal details to this learning site.

Educational example for an individual: an eligible donation of ILS 1,000, all conditions satisfied and enough tax payable. 1,000 × 35% = ILS 350 credit. The cost after fully using the credit is 650, not zero. If calculated tax before this credit is 2,000 and nothing else changes, it becomes 1,650. Insufficient tax liability does not automatically produce the same refund. The donation is paid now; the timing of the benefit depends on the route.

Under the same assumptions, calculate the credit and cost after credit for a donation of ILS 2,000. List three checks before relying on the calculation: approved institution, donation evidence and eligibility conditions.