New donation reporting system in Israel: what NPOs need to know

As of January 1, 2026, the donation reporting process in Israel has changed for non-profit organizations (amutot) that have approval under Section 46 (סעיף 46). These organizations must now report received donations through the new digital system of the Israel Tax Authority — the Israel Donations System (מערכת תרומות ישראל).

What is Section 46

Section 46 is a section of the Israeli Income Tax Ordinance that allows donors to receive a tax credit for donations made to approved NPOs.

If an NPO has valid approval under Section 46, the donor can recover part of the donation amount through the tax system. For individuals and unincorporated businesses, the tax credit is 35% of the donation amount, subject to the conditions of the law.

This is why it is important for NPOs not only to accept donations, but also to document them correctly.

What is the Israel Donations System

The Israel Donations System is a new digital system of the Israel Tax Authority for donation reporting.

The system allows organizations with Section 46 approval to report donation data directly to the Tax Authority’s databases. After that, the donation information becomes available to the donor in their personal account on the Tax Authority website.

Change from January 1, 2026

As of January 1, 2026, all public institutions with Section 46 approval must report donations through the Israel Donations System. This applies to all donations, as well as donation cancellations.

When reporting a donation, the organization must provide, among other things:

• donor details;
• donation receipt number;
• donation date;
• donation amount;
• payment method;
• for payments by check — check details.

If a donation is canceled, the organization must also report the cancellation and provide the registration number of the receipt being canceled.

Donation receipt

A donation receipt (קבלה על תרומה) is a new document that confirms that the organization received a donation and links this donation to a specific donor.

For the donor, this is important because they can use the tax benefit only based on a correctly issued and reported donation. The new system is intended to eliminate the need for donors to keep paper receipts and upload them separately when filing a tax coordination request, annual report, or tax refund request.

For NPOs, the donation receipt becomes part of digital reporting to the Tax Authority. Errors in donor details, receipt number, amount, or date may create problems for the donor when claiming the tax benefit.

What obligations NPOs have

The main obligation is to ensure the correct reporting of donation data to the Tax Authority system.

The organization must make sure that:

• it has valid approval under Section 46;
• donations are issued as donation receipts;
• when a donation is canceled, a correct donation receipt cancellation document is created (ביטול קבלה על תרומה);
• donor details are collected and reported correctly;
• the system or process used allows information to be reported to the Israel Donations System.

If an organization uses manual receipts or software that is not connected to the system, the Tax Authority also describes an option for online reporting of manual receipts. However, for regular donation collection, it is better to set up a digital process in advance.

Support in Allpay

Allpay supports the creation of correct documents for donations, including donation receipts and donation receipt cancellations.

This helps NPOs accept donations online and issue documents in line with the new digital process.

What benefits this gives NPOs

The new requirement adds responsibility, but it also makes the donation process more convenient and transparent.

For NPOs, this provides several important benefits:

• donors can receive the tax benefit more easily;
• less manual work with requests like «please send me the receipt again»;
• greater trust in the organization;
• it is easier to explain to the donor that their donation was documented correctly;
• the risk of document-related errors is reduced.

For many donors, the tax benefit is an important part of the decision to donate. If an organization can immediately issue a correct donation receipt, the process becomes clearer and more reassuring.

Main point

The Israel Donations System is not just a technical update. It is a new standard for working with donations for organizations with Section 46 approval.

NPOs should check in advance how donor details are collected, how donation receipts are created, how donation cancellations are issued, and how information is reported to the Tax Authority.

The clearer and more accurate this process is for the donor, the more trust it creates in the organization.

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