RHIF’s Taxation on Charity in Israel fights for the right for charities in Israel to have fair taxation laws.
A few years ago, generous US donors send charitable gifts, including a shipment of teddy bears meant to comfort children in Israeli children’s hospitals suffering psychological trauma caused by terrorist rocket attacks. Much to our outrage the goods never reached the intended recipients because the Israeli tax authorities assessed a non-statutory tax on the teddy bears and the other donated items. On behalf of RHIS, former Finance Minister and Justice Minister, Yaakov Neeman appealed to the Minister of Fincance, Yair Lapid, to get the tax on charitable donations revoked. Sadly, appeal was to no avail. Below is a letter from RHIF’s Attorney A Aaron, Esq to Mr. Lapid summarizing the case.
September 13, 2013
Dear Minister of Finance Lapid,
I am writing to you and a host of others on behalf of my client, the Robin Hood Israel Foundation Charity. It seems that we have arrived at the latest chapter in the ongoing saga of the case of Teddy Bears that laid the golden eggs.
The story begins in 2006 when a shipment of charitable donations from the Beverly Hills Jewish community for the children's hospitals of Israel was illegally assessed a tax by the authorities at Ben Gurion Airport. Please see the attached story from the Los Angeles Times, dated January 2, 2006.
To summarize the story- US donors sent charitable gifts to Israel, among the gifts were teddy bears specifically requested by the Misrad Harvacha for the children's hospitals. Israeli tax authorities assessed tax. High level Israeli government officials expressed outrage. The goods never reached the intended recipients.
This story recurs in 2009 and again the Israeli taxation authorities assess a tax on the teddy bears (and the other donated items) This time my client engaged former Finance Minister and Justice Minister, Yaakov Neeman to advocate of behalf of the conduit charity, Robin Hood Israel Foundation.
Adv. Neeman's firm was able to negotiate the demand of the taxing authorities down even though neither his firm nor the taxing authorities could point to a relevant law that taxed charitable gifts. There was and is no statutory basis for this tax. It seemsthe tax authorities were looking for a way to extort money from innocent donors simply because they could. To recap, in their unbridled enthusiasm to exert an unlawful use of power, the authorities wanted tens of thousands of Shekels for a tax that did not exist.
Current Israel Prime Minister, Benjamin Netanyahu, is quoted in the LA Times story; "There never has been such a law passed in any Knesset, and there never will be such a law passed in any Knesset..."
As in 2006, none of these gifts- the Teddy Bears meant to comfort children suffering psychological trauma due to terrorist rocket attacks- reached their intended donors, nor cleared airport customs for release. We are informed the teddy bears ended up in the homes of the tax authorities staff. To quote the representative of the English Speaking Residents Association of Israel (ESRA), "it was like being mugged on the subway by your own kin."
Attorney A Aaron, Esq