The Knesset has finally approved the Compensation Program for businesses affected by the 12 day war with Iran to help businesses recover and rebuild during these challenging times.
Understanding Eligibility Requirements
To qualify for the Rising Lion compensation program, businesses must meet several key criteria that demonstrate genuine economic impact. The primary requirement centers on revenue decline, with businesses needing to show at least a 25% drop in revenue when comparing June 2023 to June 2025. For companies that file bi-monthly tax returns, the threshold is slightly lower at 12.5% when comparing the combined May-June periods of 2023 and 2025.
Eligible companies must have maintained annual turnover between 12,000 and 400 million NIS during 2022, establishing a baseline for their pre-crisis financial performance. Additionally, businesses must have been operational by May 31, 2025, and those required to file VAT reports must have submitted their June 2025 documentation to remain in compliance.
Compensation Structure and Payment Tiers
VAT-exempt businesses, including those classified as Osek Patur or Osek Zair, receive fixed compensation amounts based on their annual turnover. The smallest businesses with turnover up to 50,000 NIS are eligible for 1,833 NIS, those with turnover up to 90,000 NIS can receive 3,300 NIS and those with turnover up to 120,000 NIS qualify for 4,400 NIS in compensation.
For mid-sized businesses with turnover between 120,000 and 300,000 NIS, the compensation model becomes more sophisticated, calculating payments based on the specific percentage of revenue decline experienced between June 2023 and June 2025 as per the table below:
Large enterprises with turnover ranging from 300,000 to 400 million NIS receive compensation through a more complex calculation that considers multiple factors including revenue decline percentage, average monthly expenses, and salary expenditures. However, there is a ceiling on this compensation, with the maximum amount capped at 600,000 NIS.
First calculate the Compensation Multiplier using the below chart:
Then use the following formulas to calculate the compensation for monthly expenses and salary expenses. The sum of the two is the compensation to be received.
Fixed Expense Compensation = Average Monthly Expenses (Sept 2022- August 2023) X Compensation Multiplier
Salary Expense Compensation = (June 2025 Salaries (according to form 102) *1.25) X Monthly Decline Percentage x 75%
Rental Property Compensation
The program also addresses landlords whose rental income has been disrupted. Landlords whose properties were vacated due to war-related damage or circumstances are eligible for compensation equal to the last rent payment received, covering the entire reconstruction period as determined by the Property Tax Compensation Fund.
To qualify for rental compensation, several conditions must be met. The property must have been actively rented either on the day damage occurred or within the three months preceding the incident. Additionally, the property must have been officially declared unfit for use for at least one month, and no rent payments should have been received during the reconstruction period.
Special Provisions and Additional Support
Businesses that suffered both physical damage and economic losses and remained closed through July 2025 are eligible for additional compensation beyond the standard amounts. Similarly, businesses that remained completely or partially shut down, for at least 15 days per month, throughout any remaining months in 2025 can receive additional compensation.
The program specifies that seasonal revenue variations do not reduce eligibility. However, businesses claiming revenue volatility must provide proper documentation to support their assertions. Growing businesses that have undergone strategic shifts in their operations can utilize alternative calculation methods to ensure fair assessment of their compensation needs.
Military Service and Leave Adjustments
Business owners or key personnel who were on reserve duty, maternity leave, paternity leave, or health-related leave during the base comparison period of May-June 2023 can request alternative base period calculations to ensure their compensation accurately reflects their business’s true economic impact.
Application Process and Timeline
The application process has been streamlined through the Tax Authority’s website by logging in to one’s account. A step-by-step video guide for submitting a claim is available here. All claims must be submitted by October 22, 2025.
Documentation requirements have been minimized for businesses that have maintained proper tax filing compliance. Companies that have submitted all required tax filings to the Tax Authority previously will not need additional documentation. However, any supplementary documents that may be required must be submitted within 30 days of the initial application submission.
Payment Schedule and Processing
The program is designed to provide rapid financial relief. Eligible businesses receive a preliminary payment of 60% of their approved compensation within 21 days of application approval.
The complete grant decision process is targeted for completion within 150 days of application submission. In cases where processing extends beyond this timeframe, the program automatically releases an additional 10% of the claim amount to provide further support until a final decision is determined.
The system includes a comprehensive appeals process. Businesses that disagree with their initial compensation determination can submit an appeal within 90 days of receiving their decision. A final decision will be made within eight months.
Conclusion
The Rising Lion Business Compensation Program represents a significant commitment to supporting businesses through challenging economic circumstances. By providing structured compensation tiers, special provisions for unique situations, and streamlined application processes, the program aims to facilitate business recovery and economic stability. Business owners who believe they may qualify are encouraged to review their eligibility carefully and submit applications before the October 22, 2025 deadline to ensure they receive the support available to them during this critical recovery period.
For additional information please see the government’s Frequently Answered Questions here.
