As the Israel Tax Authority (ITA) transitions to a fully digital reporting system for rental income, a common challenge has emerged: how to report income when a signed, written contract is unavailable. A new supplement to Implementation Instruction 5/2026, published today, provides a vital procedural solution. It allows taxpayers to complete their filings through the online system using alternative declarations, removing technical barriers to compliance.
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Executive Summary:
The ITA now permits taxpayers to report rental income via the online system even without an original signed contract. This can be achieved through two alternatives: a formal affidavit from the lessor (signed before a lawyer) or a formal declaration by a certified representative (lawyer or accountant). This directive is designed to streamline the reporting process for those with oral agreements or lost documentation, provided that the core details of the transaction are legally declared.
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Executive Summary: Key Findings

• Reporting Flexibility: The online system now accepts alternative documentation in place of a signed rental contract.
• Affidavit Option: Lessors may submit a written affidavit verified by a licensed attorney.
• Representative Declaration: Certified representatives can now file a declaration on behalf of their clients directly within the system.
• Mandatory Data Points: All declarations must include four essential details: property description, identity of the parties, rental period, and monthly rent amount.
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Background: Digitalization and Accessibility

In an effort to increase transparency and tax collection within the rental market, the ITA established a dedicated online portal for reporting and payment. Generally, the system requires the upload of a rental contract as supporting evidence. However, the ITA recognizes that many Israeli rentals operate on oral agreements, automatic extensions, or cases where original documents have been lost.

Instruction 5/2026 (Addition 1) was created to ensure that technical difficulties in producing a contract do not prevent taxpayers from fulfilling their legal obligation to report income and pay the required tax.
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Legal Analysis: Alternatives to the Rental Contract

The directive establishes two legally equivalent paths for reporting through the online system:

1. Affidavit by the Lessor

A taxpayer without a contract may submit a written affidavit. According to the guideline, this document must be signed before an attorney, providing it with significant evidentiary weight. The affidavit serves as a "substitute evidence" for the contract, allowing the tax assessor to verify the data entered into the system.

2. Declaration by the Representative

In a move to assist legal and tax professionals, the ITA allows representatives to submit a declaration on behalf of their clients. This alternative is particularly efficient for taxpayers who manage their affairs through permanent representatives, as it eliminates the need for a separate meeting to sign an affidavit before an outside lawyer.
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Minimum Content Requirements

Regardless of whether an affidavit or a representative’s declaration is chosen, the document must include the following four parameters:

1. Leased Property Details: Precise address and identification of the unit.
2. Lessor and Lessee Details: Full names and ID/Passport numbers.
3. Rental Period: Specific start and end dates of the reported term.
4. Monthly Rent: The actual amount paid each month.
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Practical Takeaways for Executives

• Settle Past Liabilities: Taxpayers who previously avoided reporting due to a lack of a formal contract can now regularize their status quickly and efficiently.
• Representative Accountability: Attorneys and accountants must ensure the information they declare is accurate, as the declaration legally replaces the original contractual document.
• Secondary Documentation: Even without a contract, it is highly recommended to maintain secondary evidence (e.g., bank transfer records or receipts) to support the declaration in the event of a deep audit.
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FAQ

Q: Can I submit an affidavit without a lawyer's signature?
A: No. The directive explicitly states that the affidavit must be signed before an attorney to be accepted as a substitute for a rental contract in the online system.

Q: Does this relief apply to commercial/business rentals?
A: This instruction specifically addresses the online system for reporting rental income in Israel, which is primarily used for residential rentals (under the 10% track or the exemption track). However, the principles of declaratory reporting may serve as a precedent for other cases in coordination with the tax assessor.

Q: What if the tenant refuses to sign a contract?
A: This is exactly what the new guideline addresses. The lessor can submit a unilateral affidavit detailing the actual terms of the rental, thereby fulfilling their legal duty to the Israel Tax Authority.

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