Tax Authority Targets Religious Services


The Israeli Tax Authority has put all religious service providers—from rabbis to mohalim to kabbalists—on notice that fees received will be subject to taxation, and if conducted like a business, VAT as well, Globes reported on Tuesday.

A circular recently approved by the ITA listed rabbis, kabbalists, mohalim, chazanim, rabbinical courts, and such services as conducting weddings, performing circumcisions, kashrus supervision, leading prayers, giving blessings, consultations, distribution or sales of kemeos, holy water and other items of religious significance.

Those who come under the new ruling will be required to keep accounts, file returns, declare assets, and so forth.

Criteria for taxation will include frequency and duration of services provided, qualifications and expertise of providers, the amounts involved, and whether said services are connected with an organization.

The circular also states that it is sufficient that money was given for a service to make it liable to tax, even if the service provider did not demand payment and even if there is no social norm of payment for the service.

However, giving money as an expression of gratitude or as tzedakah, as long as it is not connected with provision of a service, will be considered a gift, not liable to tax.

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