Sources inform ''Globes'' that Swiss-registered Solel Boneh International Ltd. is the unit of Arison Holdings Ltd. subsidiary Shikun u'Binui Holdings Ltd. (Housing and Construction) (TASE: HUCN) that utilized a clause in the tax code on tax breaks on foreign dividends to transfer NIS 700 million to Israel. Solel Boneh International is the global contracting arm of Shikun u'Binui, operating through local subsidiaries in Europe, Africa, and South America.
"Globes" reported that a foreign subsidiary of an Israeli company asked the Israel Tax Authority for a pre-ruling on dividends that they intended to remit to Israel. The company wanted to exploit a directive enacted because of the economic crisis, which allows a company to receive a dividend from a foreign subsidiary at a reduced tax rate of 5%, instead of 25%. The rationale behind the directive was to create an incentive for companies to remit money back to Israel.
In its financial report for 2008, Shikun u'Binui Holdings, headed by CEO Ravit Barniv, stated that objective of the directive was, among other things, to remit money to Israel from foreign subsidiaries held by Israeli firms. The company said that since this was a new directive, which had not yet been put into practice. it asked the Tax Authority for a pre-ruling to apply the directive with regard to the company's intention to distribute a dividend from a Swiss-registered subsidiary to the Israeli consolidated company. The Tax Authority issued its pre-ruling on March 2.
As a result, Solel Boneh International decided to distribute a dividend of CHF 180 million (NIS 700 million) to its parent company Shikun u'Binui Holdings, which wholly owns the Swiss-registered through Shikun u'Binui Solel Boneh Building and Infrastructure Ltd.
Published by Globes [online], Israel business news - www.globes-online.com - on April 12, 2009
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