Israel Set to Cut Corporate Tax

December 14, 2015 Taxation in Israel

These won't get you far in Israel.JERUSALEM – Businesses in Israel will soon be enjoying a tax break, as a new proposal to slash taxes looks set to pass through Knesset.

Over the weekend the cabinet of Israel approved a proposal from Prime Minister Benjamin Netanyahu and Minister of Finance Moshe Kahlon to reduce the rate of corporate income tax in the country.

If approved by the Knesset, the rate of the corporate income tax will be slashed by 1.5 percent from 26.5 percent to 25 percent.

The first reading of the proposal by the Knesset will be held on December 14th, with the two subsequent readings to be concluded by the end of December.

If the readings are passed, then the tax cut would come into force in January 1st 2016.

Explaining he need for the cut, the Finance Minister said that “…after we identified that the existing corporate tax rate is slowing economic growth in Israel, and in light of the growth in revenues, we decided on steps to reduce taxes to turn the wheels of growth and increase the competitiveness of Israeli companies.”

This is not the first move in recent times by the government to cut taxes, as on October 1st the national rate of VAT was cut by 1 percent from 18 percent to 17 percent.

Photo by canonsnapper