Response Forum

The Jewish Business Response Forum at the JCT Center for Business Ethics and Social Responsibility answers ethical and halachic questions from members of the Forum.

The Forum is directed by Rabbi Dr. Asher Meir, who is also a Senior Lecturer in Economics at the Jerusalem College of Technology. Rabbi Dr. Meir received his PhD in Economics from MIT, and previously studied mathematics at Harvard. He subsequently studied at various Israeli yeshivot, and received his ordination from the Israeli Chief Rabbinate. Prior to moving to Israel, he worked at the Council of Economic Advisers in the Reagan administration. Rabbi Dr. Meir has published several articles on the subject of modern business in Jewish law.

How the Forum Works
Following close examination of the business and economic aspects of the question, Rabbi Dr. Meir consults (when appropriate) with specialist Rabinical authorities, and provides a prompt and relevant response. It should be noted that the Forum’s role is to provide ethical and Jewish law advice. However, it should not be considered an alternative to professional legal and financial advice. The service is provided free of charge. Here we have provided synopses of some of the more interesting queries which have recently reached Rabbi Meir.

Our Center is committed to the utmost discretion in relation to all queries; therefore, the synopses occasionally omit or alter identifying details, without changing the basic facts of the case.

We welcome additional queries on the conduct of business according to Jewish law and values.

Synopses of Questions Posed to the Forum

  • 1. Tax Avoidance vs. Tax Evasion
  • 2. Money Back Guarantees
  • 3. Refunds For Partially Used Services
  • 4. Sporting Events On Shabbat
  • 5. Providing Services For Unsavory Businesses


Q. A group of siblings are partners in a family business founded by their father. In order to avoid taxation, some advocate a complex tax scheme involving an offshore tax haven. One brother wants to know if this is ethically sound, and if not, how he should relate to the other siblings who are anxious to go through with the deal.

A. The basic distinction to be made is between “tax avoidance” and “tax evasion”, between exploiting the law and flouting it. In this context, tax avoidance means minimizing taxes by taking advantage of legitimate provisions of the tax law; this can include taking a defensible position on an unresolved question of law. The line is crossed into tax evasion, which is a criminal activity, when clear tax obligations – including reporting requirements – are not met, without any sincere claim of legality.

How can the average citizen, who is not a tax expert, distinguish between a clever and prudent plan to save the family money, and a tax scam which is illegal, immoral, and may ultimately be extremely expensive? One way is to ask a reputable tax adviser. If such a professional is willing to advise you plainly that you needn’t declare sheltered income, the adviser probably believes this action is clearly legal or at least solidly defensible. Conversely, an evasive answer such as “Nothing will happen to you if you don’t report the income” or “I know that many people employ these methods” is a sign of danger.

Another guide is to consider the degree of secrecy advised. While discretion regarding assets and income is always modest and prudent, it is a bad sign if this crosses the line into “cloak and dagger” activities. Some examples: a scheme which requires wiring small amounts repeatedly instead of moving all the money at once; moving cash; using way stations in moving money from place to place, etc.


In some countries or circles tax avoidance is perfectly acceptable; in others it is seen as something shady. If a person’s personal instincts or social milieu frown on tax avoidance, then it is praiseworthy to avoid even legal schemes, but in this case it is best not to stand in the way of other family members who want to take advantage of legitimate ways of reducing their tax bill.

It is worth remembering that most tax loopholes are eventually closed. This means that the immense effort and expense involved in setting up a tax shelter may ultimately provide only a few years of tax savings. Furthermore, when these assets do become taxable the investor may have left himself with no arrangement to provide liquid income for tax payments. In addition, the sudden closing of a tax loophole may create a powerful and dangerous temptation to flout the law – a temptation worth avoiding.


Q. A medical practitioner offers some selected skeptical customers a money back guarantee, and wants to know if this presents a problem of ribit – forbidden interest charges.

A. Rabbi Eliahu Heisherik, co-author of the authoritative volume Torat Ribit, confirms that there is indeed a ribit problem in this arrangement.

The reason is that in any reversible sale or hire, the money is really only loaned. The seller, like any other borrower, has only temporary use of the payment money, and has to return it if the object or service is returned. Yet the product or service is provided only because of the payment – i.e., the loan. The end result is that the customer enjoyed the product or service in return for granting a loan. (Yoreh Deah 174:1.)

There are two possible solutions to this problem:

i. If the merchant ensures that the check can not be deposited until the trial period is complete, then the check is a deposit, and not a loan; then there is no problem of interest. (Sema, Choshen Mishpat 292:21.) This can be accomplished either by post-dating the check or by making an explicit commitment not to deposit the check until the trial period is over. The policy should be clear to the patient.

ii. Heter iska. The advance payment is deemed an “iska” or partnership loan, which the customer extends to the merchant for use in making money in the business. This entitles the customer to a share of the profits. Through the “heter iska” agreement he is agreeing to accept services rendered in lieu of any partnership profits due him. The customer can be informed that the agreement is subject to heter iska at the time of payment; alternatively, if a binding and public billing policy can be established it may specify that all credit is subject to heter iska.


Q. This same practitioner offers a series of treatments for a lower price than a series of individual treatments. (Example: 150 NIS per treatment, 1200 NIS for a series of ten.) Normally, if the patient doesn’t finish the series then the treatments completed are billed at the per-treatment rate, and the rest of the money is refunded.

The practitioner is interested in withholding a refund when his professional judgment indicates that the patient’s condition necessitates completing the entire course. In this way the fee structure is used to encourage the patient to get the best medical treatment. Is he justified in holding on to the money?

A. In this case the patient is the employer, and the practitioner the employee. The question is if an employee who is paid in advance (practitioner) for a particular work period (series of treatments) has to return part of the payment if he is fired in the middle.

The Shulchan Arukh rules that if a worker has the same opportunities after he is fired as he had when he was hired, the employer need pay him only for the time he worked. If as a result of accepting the job the employer turned down other offers which are no longer available, then the employer has to compensate him for the opportunity he was deprived of, but this compensation is less than the salary the employee would have received for working. (Choshen Mishpat 333:2.)

So in the case where the patient “fires” the practitioner in the middle, he is not obligated to pay for the remaining treatments. At most he may be held partially responsible for patients who were turned away because of his unused appointments. Therefore, the practitioner is required to give a partial refund.


Q. The questioner is an employment agent, and wants to know if he can recruit players for a prominent sporting event taking place on Shabbat in Israel.

A. It is certainly problematic to help a person find a job in which he would work, impermissibly, on Shabbat. He is effectively being abetted in his desecration of Shabbat.

Yet there are many leniencies which apply in this case. For example, one opinion states that there is no problem in “abetting” someone who is a confirmed transgressor, since he needs no encouragement to flout the law (Shach YD 151:5); another states that there is no problem unless the transgression being abetted takes place immediately after the supposed “encouragement” (see Rashi Gittin 61a, Binyan Tzion 15); yet another permits ordinarily harmless activities performed in the course of one’s usual business, even if in a particular case it will lead to a transgression. (Netziv, Meshiv Davar II:32.)

However, Dayan Eliahu Heisherik of Bayit veGan pointed out that in this case there is an additional criterion. Public sporting events in Israel are not just a question of some particular person privately defying Jewish law by working on Shabbat; they are a highly visible and public symbol of defying the very character of the Shabbat day here in the Jewish state. Therefore, Rav Heisherik’s ruling is that it is improper to have any direct business connection to these events – including finding players.


Q. A computer programmer designs encryption systems for a television service provider which broadcasts a variety of programming material, including some with indecent content. He wants to know if his indirect contribution to this problematic programming presents a legal or ethical difficulty.

A. The basic concern is certainly well-placed. Halakha definitely views indecency as a general human problem, and not specifically a Jewish one (see Rashi, Bereshit 34:7), and abetting it is certainly improper. For example, Rav Chaim Palaggi forbade in sharp terms renting out premises to be used as a house of ill repute. (Chaim BeYad 19.)

This case is parallel in many respects to the previous one. On the one hand, the individual leniencies mentioned in the previous response all apply: the participants in the business are inured to it; the transgression will take place only much later; the programming itself is an ordinary business activity. On the other hand, indecency may be considered a public blight and not merely a private transgression.

However, in this case we have the additional consideration that the unsavory content is only a small part of the broadcaster’s fare, and there is even a doubt as to whether this endeavor is being abetted, since the company could easily decide to discontinue this line of business.

The conclusion is that there is no reason to eschew this line of work.

One exemplary business which participates in our Forum declines to provide on-line billing services for indecent Internet sites. This policy is praiseworthy. Here there is more reason for concern because these sites are exclusively dedicated to immoral fare and because the forbidden activity takes place immediately after the billing and as a direct result of it.