Law for Reducing the Use of Cash 2018

The Law on Reducing Cash Usage, 2018.

On January 1, 2019, the Law on Reducing Cash Usage came into effect.  
What the law basically states in short:

1. Any transaction carried out between a buyer and a business (self-employed or company) cannot be paid in cash exceeding 11,000 NIS or 10% of the transaction amount (whichever is lower).  
For example: A purchase of 30,000 NIS (according to an invoice) – maximum 3,000 NIS in cash.  
A purchase of 300,000 NIS – maximum 11,000 NIS.

2. Transactions between private individuals (not a business) – maximum cash payment of 50,000 NIS or 10% of the transaction amount in cash (whichever is lower).

3. Payment of wages or donations will be limited according to the rules mentioned above.

Notes:  
a. The above restrictions do not apply to cash payments between family members (spouse, parent, grandparent, son, daughter, brother or sister and their children, grandson or granddaughter, and the spouses of any of the above).  
b. During the first three years of the law (until January 2022), the above restrictions will not apply to transactions with residents of the territories.  
c. A transaction in which one party is a foreign tourist is allowed up to 55,000 NIS.

4. The law also sets rules regarding checks:

a. It is mandatory to write the name of the payee on the check. This obligation applies to both the issuer of the check and the recipient.

b. Business entity: Prohibition on endorsing a check or accepting an endorsed check without the endorser's details being specified on the check (it is not allowed to issue/receive an open check or a check without the endorser's details) for any check amount. c. Non-business entity: Prohibition on endorsing a check or accepting an endorsed check without the endorser's details being specified on the check when the check amount exceeds 5,000 NIS. d. The bank will not cash a check if the payee's name is not specified (open check), or an endorsed check over 10,000 NIS if it has been endorsed more than once (not to a financial institution such as a credit company or bank), as well as if the names of the endorser and endorsee and the endorser's ID number are not specified (this section will come into effect on 01.07.19). 5. Real estate transactions – increased reporting; the purchaser will report the source of funds for the purchase. 6. From 01.01.2020, the Minister of Finance (with approval from the Minister of Justice, the Governor of the Bank of Israel, and the Constitution Committee) reduced the amounts so that instead of 11,000 NIS, the amount is reduced to 6,000 NIS, and instead of 50,000 NIS, it is reduced to 15,000 NIS (except for vehicle purchases), meaning a gradual reduction of cash usage. Note: Any use of this information or reliance on it is at the user's own responsibility; please refer to the legal provisions or seek personal advice.