Government bill · 20th Knesset · published as law 5 July 2016
חוק לתיקון פקודת מס הכנסה (מס' 226), התשע"ו-2016Law to Amend the Income Tax Ordinance (No. 226), 2016 · automatic translation · suggest a correction
Status: התקבלה בקריאה שלישית
Topics: Taxes* · * from the Knesset's official law classification
Official summary of the law (Knesset)
The Income Tax Ordinance (Amendment No. 226), 2016 (hereinafter - the Amendment), was passed in second and third reading on 27 June 2016. The Amendment is intended to enable an Israeli resident or Israeli citizen who is a resident of Judea and Samaria, who has income produced or accrued in Judea and Samaria, and who is entitled to a grant for the encouragement of capital investment in respect of the enterprise from which that income was produced or accrued under the administrative arrangement applicable in Judea and Samaria, to receive tax benefits under the terms and scope granted in Israel under the Law for the Encouragement of Capital Investments, 1959, and under the Law for the Encouragement of Capital Investments in Agriculture, 1980.
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Hebrew original
פקודת מס הכנסה (תיקון מס' 226), התשע"ו-2016 (להלן - התיקון), התקבל בקריאה השנייה והשלישית ביום כ''א בסיוון התשע"ו (27 ביוני 2016). התיקון נועד לאפשר לתושב ישראל או אזרח ישראלי שהוא תושב יהודה ושומרון, שיש לו הכנסה שהופקה או נצמחה ביהודה ושומרון, והוא זכאי למענק לעידוד השקעות הון בשל המפעל שממנו הופקה או נצמחה אותה הכנסה לפי ההסדר המינהלי החל ביהודה ושומרון, לקבל הטבות מס בתנאים ובהיקף הניתנים בישראל לפי החוק לעידוד השקעות הון, התשי"ט-1959, ולפי החוק לעידוד השקעות הון בחקלאות, התשמ"א-1980.
Readings
- 29 March 2016 · First reading · להעביר את הצעת החוק לוועדההצעת חוק לתיקון פקודת מס הכנסה (מס' 224), התשע"ו-2016Bill for the Amendment of the Income Tax Ordinance (No. 224), 2016autoBill passed first reading18 for · 14 against
- 27 June 2016 · Third reading · אישור החוקהצעת חוק לתיקון פקודת מס הכנסה (מס' 226), התשע"ו-2016Bill to Amend the Income Tax Ordinance (No. 226), 2016autoLaw passed38 for · 30 against
What was said in the plenum
The discussion deals with several legislative amendments to the Income Tax Ordinance, the main one of which (Amendment No. 226) seeks to apply to residents of the "area" (Judea and Samaria) tax benefits granted under the Capital Investment Encouragement Laws, similar to the grants currently given to them under an administrative arrangement; alongside this, additional amendments concerning registered partnerships and REIT funds were discussed. A central part of the discussion focused not on the economic content of the income tax amendment but on the question of whether applying the tax benefits to the "area" constitutes a step of creeping annexation and a preferential allocation of resources to settlements at the expense of the rest of the state's citizens.
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Hebrew original
הדיון עוסק במספר תיקוני חקיקה לפקודת מס הכנסה, שהמרכזי בהם (מס' 226) מבקש להחיל על תושבי ותושבות ה״אזור״ (יהודה ושומרון) הטבות מס הניתנות מכוח חוקי עידוד השקעות הון, בדומה למענקים המוענקים להם כיום מכוח הסדר מינהלי; לצד זאת נדונו תיקונים נוספים הנוגעים לשותפויות רשומות ולקרנות ריט. חלק מרכזי מהדיון התמקד לא בתוכן הכלכלי של התיקון למס הכנסה אלא בשאלה האם החלת הטבות המס על ה״אזור״ מהווה צעד של סיפוח זוחל וחלוקת משאבים מועדפת להתנחלויות על חשבון שאר אזרחי המדינה.
Arguments for
- The law corrects an existing discrimination, since an Israeli resident in the area is liable for full taxes as an Israeli resident but does not enjoy the tax benefits granted under the Capital Investment Encouragement Laws, unlike the grants already given to him by virtue of an administrative arrangement.Moshe Gafni (United Torah Judaism), Yitzhak Cohen (Shas)
Arguments against
- The law is another step in a systematic trend of granting benefits, grants and budgets to settlements and communities in Judea and Samaria at the expense of the periphery and the middle class in Israel.
- This is a step of "creeping annexation" that gradually and by salami tactics applies the main Israeli law to the territories, without this being anchored in an overt political decision and without reference to the political-legal status of the territories.
- The Law for the Encouragement of Capital Investments was originally intended to assist the socio-economic periphery within the State of Israel, and extending it to the territories diverts it from its original purpose and harms the populations that truly need it.Esawi Frej (Meretz), Zehava Galon (Meretz)
- Granting these benefits comes at the expense of budgets needed for health, education and welfare, and constitutes a waste of public funds instead of solving the real hardships of the state's citizens.Dov Khenin (Joint List), Abdullah Abu Maaruf (Joint List)
- There is a hypocritical gap between declarations of support for the two-state solution and actual voting in favor of laws that strengthen and perpetuate the settlements and continue the occupation.Esawi Frej (Meretz), Basel Ghattas (Joint List)
Who spoke (16)
| Member | Faction | Readings | Speeches | In the final vote |
|---|---|---|---|---|
| Moshe Gafni | United Torah Judaism coalition | First reading, Third reading | 4 | for |
| Eli Cohen | Kulanu coalition | First reading | 8 | for |
| Zouheir Bahloul | Zionist Union opposition | First reading | 2 | no record |
| Orly Levi-Abekasis | Yisrael Beytenu coalition | First reading | 7 | no record |
| Erel Margalit | Zionist Union opposition | First reading | 4 | no record |
| Ayelet Nahmias-Verbin | Zionist Union opposition | First reading | 1 | no record |
| Yoseph Yonah | Zionist Union opposition | First reading | 10 | against |
| Esawi Frej | Meretz opposition | First reading, Third reading | 12 | no record |
| Haim Jelin | Yesh Atid opposition | First reading | 8 | against |
| Yoav Kisch | Likud coalition | First reading | 8 | for |
| Yitzhak Cohen | Shas coalition | First reading | 2 | no record |
| Yigal Guetta | Shas coalition | First reading | 3 | no record |
| Zehava Galon | Meretz opposition | Third reading | 1 | against |
| Dov Khenin | Joint List opposition | Third reading | 1 | against |
| Basel Ghattas | Joint List opposition | Third reading | 2 | against |
| Abdullah Abu Maaruf | Joint List opposition | Third reading | 2 | no record |
An automatic summary of the plenum transcripts: the debate on the bill at every reading it was voted on. Arguments are given as the speakers made them; this is not an assessment. The list of speakers comes from the transcript, without a model. Transcripts of the sittings: 1, 2 · write to the author
Reservations to the second reading
4 reservations were filed: proposed changes to the text the committee brought to the second and third reading.
The reservations filed to the law dealt with the definition of a resident of the area and the capital investment encouragement laws relevant to the proposed section, with limiting the budgetary cost of the provision, and with a demand to condition the law's applicability on the application of Israeli sovereignty over the area.
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Hebrew original
ההסתייגויות שהוגשו לחוק עסקו בהגדרת תושב האזור ובחוקי עידוד השקעות הון הרלוונטיים לסעיף המוצע, בהגבלת העלות התקציבית של ההוראה, ובדרישה להתנות את תחולת החוק בהחלת הריבונות הישראלית על האזור.
By faction
- Meretz opposition · 4 reservations · 5 members
A joint reservation counts for every faction whose members filed it.
Who proposed what
- קבוצת מרצ · 4The Meretz group proposed to change the residency conditions set out in the section, to limit the budgetary cost arising from the provision of the section, to change the definition of the Capital Investment Encouragement Laws, and to condition the application of the law on the application of Israeli sovereignty over the area.Sections: לסעיף 1, לאחרי סעיף 1
Asked to speak: Ayman Odeh (Joint List), Masud Ganaim (Joint List), Jamal Zahalka (Joint List), Ahmad Tibi (Joint List), Aida Touma Sliman (Joint List), Abd Al Hakeem Haj Yahya (Joint List), Hanin Zoabi (Joint List), Dov Khenin (Joint List), Talab Abu Arar (Joint List), Yousef Jabareen (Joint List), Basel Ghattas (Joint List), Osama Saadi (Joint List), Abdullah Abu Maaruf (Joint List)
Proposers and reservation numbers are extracted automatically from the committee version, and the count is checked against the numbers printed in it. The descriptions are an automatic summary. Committee version for the second and third reading (PDF) · write to the author
Reservations, sections and other votes (4)
In order. Votes on reservations and individual sections are shown separately from the vote on the bill as a whole.
- 27 June 2016 · Second reading · הסתייגותהצעת חוק לתיקון פקודת מס הכנסה (מס' 226), התשע"ו-2016Bill to Amend the Income Tax Ordinance (No. 226), 2016auto27 for · 35 againstVote on a reservation (amendment)
- 27 June 2016 · Second reading · הסתייגותהצעת חוק לתיקון פקודת מס הכנסה (מס' 226), התשע"ו-2016Bill to Amend the Income Tax Ordinance (No. 226), 2016auto28 for · 36 againstVote on a reservation (amendment)
- 27 June 2016 · Second reading · הסתייגותהצעת חוק לתיקון פקודת מס הכנסה (מס' 226), התשע"ו-2016Bill to Amend the Income Tax Ordinance (No. 226), 2016auto28 for · 37 againstVote on a reservation (amendment)
- 27 June 2016 · Second reading · קריאה שנייההצעת חוק לתיקון פקודת מס הכנסה (מס' 226), התשע"ו-2016Bill to Amend the Income Tax Ordinance (No. 226), 2016auto38 for · 29 againstVote on sections of the bill