Operation “Roar of the Lion” – Compensation Update

We wish to inform you that on March 19, 2026, a governmental bill memorandum was published, aimed at establishing a compensation mechanism for businesses that suffered economic damages as a result of Operation "Roaring Lion”, which began on February 28, 2026, leading to the declaration of a nationwide special home front emergency situation.

Please note that this update is based on the governmental bill memorandum published by the Ministry of Finance, which may change during the legislative process. We are monitoring the process closely and will provide updates accordingly.

We wish to highlight that a ‘Red Track’ (i.e., a compensation track for businesses located in a limited list of communities typically situated along conflict lines or borders) is currently available. Accordingly, eligible businesses should prepare for the possibility of submitting a claim for indirect damage resulting from the operation. It should be noted that a green track (based on turnover/salaries) will also be established for the relevant communities, but a draft bill on the matter has not yet been published.

Below are the key elements of the proposed compensation framework for indirect damages resulting from Operation "Roaring Lion” nationwide:

• The compensation is intended for businesses with an annual turnover ranging from NIS 12,000 to NIS 400 million that experienced a decline of more than 25% in turnover during the eligibility period compared with the base period, provided that the decline in turnover resulted from indirect damage related to Operation "Roaring Lion”. It is proposed that, for most businesses, the base period will be the year 2025 (localities that were evacuated pursuant to a government decision during the Iron Swords war will be excluded and assigned a different base period).
• Additional eligibility conditions for submitting a compensation claim include the filing of periodic VAT reports for March–April 2026 and the proper maintenance of accounting records for 2026.
• The method for calculating the compensation is essentially identical to the compensation framework applied during Operation "Am Kelavi”, with the main differences being the eligibility and base periods; decline in turnover must be at least 25% regardless of the VAT reporting method (in previous frameworks, businesses reporting on a bi‑monthly basis were eligible starting with a 12.5% decline); and the compensation ceiling to which a business suffering indirect economic damage resulting from direct physical damage will be entitled.

For details regarding the proposed framework, please follow this link.

We will publish a detailed update immediately after the law is approved by the Knesset.

This update does not constitute legal advice and should not be relied upon without obtaining appropriate legal counsel.