Starting Sunday 3.5.2020 until 17.7.20 (for 70 days), you may apply for a Coronavirus Crisis Aid Grant in the Tax Authority website:

https://secapp.taxes.gov.il/SrVeImut/frmRashiKnisa.aspx?src=LONew#no-back-button

The eligibility of applicants will be clarified upon completing the request, except for rare cases. Please find attached the regulations.

The layout includes:

1. Fixed expenses grant for small businesses – 5.2 billion NIS. The grant is aimed for covering fixed expenses of  small business with a turnover of up to 20 million NIS, whose sales volume was significantly hit in March-April. Nonprofit organizations which are recognized as public institutions also eligible for this grant. A business may receive up to 400K NIS, depending on the decrease in its activity. The grant will be paid by the Tax Authority in May.
2. Aid grant for the self-employed – 2.8 billion NIS. Following the first round in April, the grant will be provided for self-employed persons whose business has decreased by at least 25% in March-June. The grant will be paid directly into the bank account. It will amount to 70% of the average monthly taxable income and up to a sum of 10,500 NIS.  
    Employed controlling personnel are eligible for the grant as well.

 

 

 

 

 

 

We at Brooks-Keret keep monitoring the latest developments in the US due to the current COVID-19 crisis and at this point we’d like to update you regarding a specific benefit offered as part of the stimulus package announced earlier by the US government, Paycheck Protection Plan (PPP):

The Small Business Administration (SBA) is administering a new programs to provide loans of up to $10 Million for qualifying small businesses, along with an opportunity for future loan forgiveness.  

The maximum loan amount is 2.5 times the business average monthly annual payroll cost for the preceding 12 months, or $10 Million, whichever is less. No personal guarantee is required. 

Loan proceeds may be used to pay for the following expenses: 

• Payroll costs 
• Rent 
• Utilities 
• Interest on debt obligations incurred before March 1, 2020 

Payroll costs are capped at $100,000 on an annualized basis for each employee.

The loan amounts will be forgiven as long as:  

• The loan proceeds are used to cover payroll costs, and most mortgage interest, rent, and utility costs over the 8 week period after the loan is made; and 
• Employee and compensation levels are maintained.  

Partial forgiveness may also apply. Forgiven amounts will not be included in the company’s taxable income.

Brooks-Keret stands by you during these uncertain times, as the world is challenged with the impact of COVID-19. In this email, we would like to notify you of the following updates, related to US companies:

Tax return due date

On Friday, March 20^th, the US Treasury has announced that the tax filing deadline has moved from April 15^th to July 15^th, for both corporations and individuals. This announcement follows an earlier announcement to delay the 2019 tax payments to July 15^th.

Some of the states have already announced they will follow the federal deadlines (NY, CA, IN, OR, MD). Not all states have made such an announcement but e believe it is likely that they will do so shortly.
We will keep monitoring the situation and update you as new relief is announced.

We at Brooks-Keret are working with each client’s US CPA to assure timely filing.

 *** Please note that the information detailed hereafter does not constitute professional legal advice. You are welcome to reach out to us so that we can refer you to proper consultation ***

Last week, the US government has released the Families First Coronavirus Response Act, which will take effect on April 2^nd. The law is a plan aimed at addressing the impact of the COVID-19 outbreak on Americans and introducing paid sick leave and an expanded family and medical leave act to the nation’s employers. Some of you may have already received information about this new act from your payroll providers. However, the Secretary of Labor is expected to set specific legislation regarding this act and it is expected that this law will not apply to small business, to be more specific, companies with less than 50 employees.

At Brooks-Keret, we will monitor the legislation and will advise as new rules are announced.

For now, the only requirement for small employers is to follow their sick leave policies, if they have any in place, or follow the state mandated sick pay laws, where applicable (CA, NY, MA, NJ).

Companies looking to mitigate expected losses due to the crisis and cut back on payroll expenses have a few options, among them are reduction-in-force (either temporary or permanent layoffs), furloughs, and reduction in hours and/or pay.

When making any such step, the following considerations must be taken into account:
* The criteria for employees’ who’s employment is changed/terminated must be objective and implemented across the board.
 ** Exempt employees (that is, exempt from over time payment under the federal FLSA or state adopted law) must be paid their regular weekly pay for any week in which they were working, even if only partially, otherwise their exempt status is compromised.
*** Employees must work a minimum of 30 hours per week in order to be eligible for benefits.
Note that Unemployment pay is mandated per state’s rules and regulations and are paid up to the state’s maximum amount. Benefits could differ between the states.
Most states however have waived 2 main requirements for unemployment pay –

• The 7 days waiting period before unemployment benefits apply
• The requirement to proof the terminated employee is actively seeking another job.

Partial unemployment payments are also available, in case both hours and pay are reduced, however it is only paid if the portion of the pay paid by the employer does not exceed the state’s maximum benefit.

We at Brooks-Keret will keep monitoring any new legislation and will update you with any major changes.

We hope you and your families are safe and well. We are here to support you with any challenges you are now facing.

 

Dear Client, Brooks-Keret stands by you continuously, particularly in this period we are working non-stop remotely to support you, and so that you receive the latest news to assist everyone during this time. 

 

In light of the situation, the State of Israel is supporting businesses by providing different types of grants:

 

The State has provided various governmental guarantees in the amount NIS 8 billion, and they are available to various businesses. The guaranteed loan is divided so that 85% is guaranteed by the State, 5% by the borrower’s bank and 10% by company guarantee.

In general, those eligible for state guaranteed loans are companies that can prove the Corona virus has a direct impact on their business operations. The guaranteed loans are given to provide working capital financing.

 

Any company choosing to apply for such grant, must submit the following documents:

• Borrower Affidavit

• Special Accountant / Tax Advisor report

• Confidential Disclaimer

• Consultant Affidavit

Attached are the various documents mentioned above, as well as a business loan questionnaire, as well as a list of documents that should be attached to a loan application.

 

1. February 2020 VAT payments were deferred until March 26, 2020.

2. Income tax advances and Social Security:  In general, the reporting deadlines   income and social security benefits do have not changed. However, as the business’s projected profit may decline as a result of the impact of the Corona virus on the business, the 2020 income tax advance rate may be reduced.

3. Deferral of business payments for municipal taxes: we are currently studying and evaluating this issue, and will send an update at a later stage. 

 

The solution of unpaid vacation allows business owners some breathing space and relief. The unpaid vacation period must exceed at least 30 days, in order for the employee to be eligible for unemployment benefits from the Social Security. 

Furthermore, and in accordance with the Prime Minister’s instructions dated March 16, 2020, it appears that the employee will have to provide evidence showing a continuous employment period of only 6 months (as opposed to 12 months) within the 18 month period prior to the date of unemployment benefits claim. 

 

 

During the unpaid vacation period, the employer is obligated to report and make minimal Social Security rate payments on behalf of the employee.

 

The employee must register the Social Security website, at the following link:

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* Please note that the website is currently overloaded with claim applications, therefore all employees registered by March 19, 2020, shall be considered as if registered as of March 15, 2020.

 

For further details, please see the link below:

https://www.btl.gov.il/About/faq/Corona/Avtala/Pages/default.aspx  

 

 

 

We will continue updating you on the important issues and supporting you all the way.

Feel free to contact us with any questions you might have.

 

Keep safe,

Brooks-Keret