Tax Break Pays Off in Israel
JERUSALEM – A new program by the tax authority in Israel has yielded significantly positive results, leading to billions being invested into the economy and paid out in taxes.
On November 13th the Tax Authority of Israel announced that more than NIS 4.37 billion has been collected from large businesses as part of a new profit repatriation program aimed at addressing the problem of “trapped profits”.
The program is intended to provide an incentive to large companies from Israel to bring back funds and retained earnings held in overseas accounts.
Businesses which agree to repatriate profits will pay a tax rate of between 6 and 10 percent on the amount, compared to a standard rate of 25 percent.
In order to take advantage of the program, over the next five years businesses are required to reinvest some of the funds back into new projects or developments in Israel.
The Tax Authority currently estimates that as a direct result of the program the three biggest participating countries alone will reinvest NIS 1.8 billion into the local economy, although no estimates have been completed on how much the total will rise with the participation of the other 207 businesses.
Photo by RonAlmog