Section 46(a) Receipts for the Synagogue — The Complete Guide

One of the most common questions a new gabbai or treasurer asks is: "Can we issue tax-deductible receipts?" The answer is — it depends. If the synagogue holds a "public institution" approval under Section 46(a) of the Income Tax Ordinance, then yes. And if you have the approval, it would be a shame not to use it. Every Section 46(a) receipt you don't issue means a donor losing out on a 35% tax credit on their gift. In this article, we'll explain from the ground up what it is, who's eligible, how to get the approval, what the donor receives, and how to avoid mistakes.

What is Section 46(a)?

Section 46(a) of the Income Tax Ordinance is a mechanism that lets the State encourage donations to organizations that serve the public. A private donor who gives to an approved public institution is entitled to a tax credit equal to 35% of the donation amount (for donations starting at ₪200 and up — the regulations are updated from time to time). A donating company receives a credit under Section 46(a)(1). This means a ₪1,000 donation to an approved synagogue actually costs the donor only ₪650 in real terms.

The synagogue has to meet certain conditions — it must be a registered nonprofit association (amuta) or a public benefit company, must pursue public purposes, must keep proper accounting records, and must hold an active, dedicated approval from the Ministry of Finance and the Israel Tax Authority.

Who's eligible? Understanding "public institution" status

Not every synagogue automatically gets the approval. A synagogue is eligible if it:

• Is registered as a nonprofit association (amuta) under the Amutot Law, 5740-1980, or as a public benefit company.
• Holds a "Certificate of Proper Management" from the Registrar of Nonprofit Associations.
• Holds a withholding-tax exemption certificate from the Israel Tax Authority.
• Operates for purposes recognized by law as public purposes — religion, education, welfare.
• Has submitted an application for Section 46(a) approval and received it — the public committee approved it and the Minister of Finance signed off.

Important to understand: being a registered nonprofit alone is not enough. A nonprofit needs to receive the explicit Section 46(a) approval. The initial approval process can take 6-12 months, and includes submitting documents, financial reports, and an eligibility review. Once you have the approval, it's valid for a set period (typically 3 years) and needs to be renewed.

What does the donor get? — A 35% tax refund from the State

A private donor who is an Israeli resident and gave more than ₪200 in a tax year, up to a certain cap, can claim a tax credit of 35% of the donated amount (including cumulative donations within that same year). The credit is claimed when filing the annual tax return, or through a tax-coordination adjustment on a payslip. Example: a donor gave ₪3,000 to the synagogue during the tax year. When filing their return, they'll get back ₪1,050 from the Tax Authority.

For companies, the credit works on slightly different terms — instead of 35%, a company is entitled to a tax credit equal to the corporate tax rate (rather than a deductible "recognized expense"), under Section 46(a)(1) of the Income Tax Ordinance.

What has to appear on the receipt?

An improperly formatted receipt won't be accepted by the Tax Authority. These are the mandatory details:

• The public institution's full legal name (exactly as it appears on the approval).
• The Income Tax file number (company/corporate number or nonprofit registration number).
• Explicit wording stating this is a "receipt under Section 46 of the Income Tax Ordinance."
• The Section 46(a) approval number and its expiration date.
• The donor's full name, national ID (teudat zehut) number, and address.
• The donation amount, both in numerals and spelled out in words.
• The date of the donation and the date of the receipt.
• The payment method (cash / credit card / bank transfer).
• The institution's signature / stamp.
• A sequential receipt number.

Miss even one of these details, and the receipt could be disqualified. In particular, the Section 46(a) approval number and its expiration date is the detail most synagogues forget to include.

How do you issue receipts? — Manual vs. automatic

There are two ways to issue receipts:

Manual issuance

A printed receipt book, or a Word file you print out. It works, but it's painful: you have to fill in every detail manually, send it to the donor, and keep a copy for the annual report. With 200 donors a year, that's 200 separate times typing the same fields. On top of that, a receipt book must be numbered sequentially — skip a number, and it becomes a problem for your accountant.

Automatic issuance

Donation management software issues the receipt automatically the moment the donation is received. The receipt is emailed to the donor as a PDF, saved in the system, and shows up automatically in the annual report. Every field — including the approval number and its expiration date — is filled in automatically. At Beita, automatic receipt generation is in development and will launch soon, once approval from the Israel Tax Authority is complete. See the full pricing plans.

Annual reporting to the Tax Authority — what you need to do

A public institution must file an annual report with the Tax Authority detailing the donations it received. The report includes donor names, ID numbers, donation amounts, and receipt numbers. The report is usually filed by the synagogue's accountant, and it has an annual filing deadline. Failure to file leads to fines, and in serious cases, to revocation of the approval.

Management tip: keep all receipts in one place (a digital folder) throughout the year, so that when your accountant asks for the file for the annual report, they get it in 5 minutes, not 3 days.

4 common mistakes that get receipts disqualified

1. You forgot to state that it's a "receipt under Section 46": Just writing "receipt" isn't enough for the donor to present to the Tax Authority.
2. The approval number is out of date: Since the approval renews every 3 years, the approval number can change. Make sure it's current.
3. The receipt isn't worded according to the regulations: Missing text, a missing spelled-out amount, an inaccurate date — all of these lead to disqualification.
4. You issued a receipt for a donation you never received: A dangerous mistake. If a donor said they would give but never actually did, you must not issue a receipt. This can lead to criminal proceedings.

Section 46(a) isn't just a technical piece of law — it's a tool that lets the synagogue raise more donations without asking for more money. A donor who knows they're getting a meaningful refund gives more wholeheartedly, and in larger amounts. Investing the time in the initial approval, and in setting up an organized receipt-issuing system, is one of the most worthwhile investments a synagogue treasurer can make.