Rights10/4/2026

Applications Open for Compensation for Damage Caused by Protection-Money Extortion

The Israel Tax Authority has launched a pilot program for business owners whose property or home was damaged as a result of “protection money” extortion. Compensation of up to 2 million shekels is available for direct damage, but the application must be submitted within seven days.

Key facts

•Pilot period: October 4 to December 4, 2026
•Application deadline: seven days after the damage was caused
•Maximum compensation: 2 million shekels
•Processing time: up to eight months
•Program budget: 35 million shekels
•Basis: Government Decision No. 4299

Who May Apply

The program runs from October 4 to December 4, 2026, and applies to damage caused in Israel, including in Area C. Business owners who operate lawfully, hold a valid license, and have an active file with the Israel Tax Authority may apply. The damage must be connected to a refusal to pay the extortionists or to contacting the police.

What Conditions Must Be Met

The applicant must file a police complaint that is recognized as related to “protection money” extortion. It must also be proven that there is no insurance coverage for maliciously caused damage or that the insurance company refused to pay. The business owner must comply with the insurer’s requirements for protecting the property and mitigating risks and, in the event of damage to a structure, prove that it was built lawfully.

What Is Compensated and in What Amount

Compensation is intended for direct damage to the business, equipment, inventory, or the business owner’s home. The program does not cover indirect losses or damage caused to third parties. The maximum payment is 2 million shekels, and processing the application may take up to eight months, in accordance with the procedure’s provisions.

How to Apply

The application must be submitted to the Israel Tax Authority’s Compensation Fund through a dedicated online system within seven days of the date the damage was caused. The damage must not be repaired before the application is submitted and before an inspection by a Property Tax appraiser: doing so may impair the damage assessment and lead to rejection of the claim. However, glass and debris may be moved aside.

The Basis for the Pilot Program

The mechanism was established pursuant to Government Decision No. 4299 to assist business owners harmed by extortion. The program was allocated 30 million shekels from the Israel Tax Authority’s budget and 5 million shekels from the Ministry of National Security’s budget; its effectiveness will be evaluated within no more than six months. Government Decision No. 4298 separately establishes enforcement measures to combat extortion.

What this means for you

It is important for an affected business owner to contact the police and the Compensation Fund promptly and preserve the scene until the appraiser’s inspection. Eligibility for payment depends not only on the connection between the damage and the extortion, but also on the business’s status, insurance coverage, compliance with protection requirements and, in the event of damage to a structure, the lawfulness of its construction.

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