On 4 October 2026 the Tax Authority's Compensation Fund opened a new track. It pays business owners whose property was damaged because they refused to pay protection money, or because they reported the extortion to the police. The track is a pilot under government decisions 4298 and 4299. It covers damage that occurs between 4 October and 4 December 2026. Damage from before that date is outside it.
Compensation is capped at ₪2 million per claim. The pilot's budget is ₪30 million from the Tax Authority plus ₪5 million from the Ministry of National Security.
Who qualifies
The business has to be legal, with a valid business licence and an active file at the Tax Authority. The damage has to be direct and to property the owner holds: the building, equipment, stock, or the owner's home. Indirect losses, such as lost trading days or customers who stayed away, are not covered. Neither is damage to a third party, such as a neighbour.
The core condition is a police complaint that the police have recognised as linked to protection money extortion. Without that recognition there is no claim.
The fund pays only where insurance does not. You need to show the business was insured and that the insurer either did not cover the damage or rejected the claim. The business must also have met the risk-reduction conditions its insurer set. For damage to a building, the building must have been built with a permit, and the paperwork goes with the claim.
Seven days to file
Claims go to the Compensation Fund within seven days of the damage, through the Tax Authority's dedicated online system. That is a short window for someone dealing with the police and the clean-up at the same time. Attach the police complaint confirmation, the insurer's rejection letter and, for a building, the construction permits.
Processing takes up to eight months. An owner who needs the money to reopen should plan cash flow for that period without it.
Leave the repairs until the assessor has been
Do not repair the damage before filing, or before a Tax Authority assessor has inspected it. An early repair can get the claim rejected. Clearing glass and debris to make the site safe is allowed.
In the first days after an attack, that means filing the police complaint and making sure it is recorded as extortion-related, asking the insurer for a written answer, photographing the damage, and submitting the claim to the Compensation Fund before the seventh day.
The law behind it
Israel's protection racket law took effect in August 2023 and created two extortion offences. The penalty is up to six years in prison without threats, and seven to nine years with threats. The law deals with punishing the extortionist. The new track addresses the other side, the business owner who was hit. The pilot runs for two months. Extending it or making it permanent would take a further decision.