Tabled by: MK Fania Kirshenbaum (Yisrael Beitenu) on 7 February 2011.
This bill, officially titled “Amendment to the Income Tax Ordinance (Taxation of Public Institutions Receiving Contributions from Foreign State Entities),” seeks to deprive nonprofit organizations receiving money from a “foreign state entity” of their legal right to be exempted from income tax and sets their taxation rate at 45%. The bill’s provisions would exclude organizations receiving funding from the state, in order to preserve the tax-exempt status of organizations working in areas such as welfare and education, while focusing its impact primarily on human rights organizations.
The bill was put on hold in July 2011 by its promoter, MK Fania Kirshenbaum (Yisrael Beitenu). At the time, MK Kirshenbaum announced that she will postpone the bill until the parliamentary committees of inquiry, which are supposed to look into the foreign funding of Israeli NGOs, will finish their investigation. However, the committees of inquiry were then rejected by the Knesset, and in November 2011 MK Kirshenbaum continued to promote the bill. On 13 November 2011, the Ministerial Committee on Legislation decided to support this bill – 11 ministers voted in favor and 5 against. An appeal was made as part of the vote at the ministerial committee, and therefore the bill is expected to be brought for discussion by the government’s full assembly, together with a separate but related bill proposed by MK Ofir Akunis, before they can proceed to a preliminary reading in the Knesset plenum. However, on 20 November 2011, Israeli media outlets reported that Prime Minister Netanyahu has instructed to freeze the advancement of these bills.
On 30 November 2011, a new version of this bill was presented – combining the Kirshenbaum Bill and the Akunis Bill into one, hybrid bill. However, following harsh criticism, including by Israel’s Attorney General, the new version is not currently being promoted.
7 February 2011: Bill was presented in the Knesset.
13 November 2011: The Ministerial Committee on Legislation voted in favor of the coalition supporting this bill.
30 November 2011: New version of bill presented, which combines the Akunis Bill and the Kirshenbaum Bill into one, hybrid bill.
Status: Bill is awaiting its preliminary reading in the plenum.
