Pharmaceutical importer Promedico and the tax assessor for large businesses reached an agreement under which Promedico’s appeal on its tax assessments for 1983-92 will be accepted in full. It was also agreed that the tax assessment for 1993 will be cancelled.
Tel Aviv District Court Judge Braha Ofir-Tom gave legal sanction to the agreement. The ruling puts an end to another stage in the Promedico affair, although the Income Tax Authority is continuing its civil suit against the company.
Discussions between the parties in the civil suit opened after Jerusalem District Court Judge Ayala Procaccia convicted the defendants of tax evasion relating to fees paid to Eurotaph. The defendants were Teva (Nasdaq: TEVA) CEO Eli Hurvitz, who served as Promedico chairman in 1980-87; Promedico CEOs Benjamin Jesselson and Alexander Eisenberg; and the company itself.
Last January, Promedico submitted to the court a preliminary motion to appeal in limine and cancel the tax assessment following the Supreme Court’s clearing Hurvitz, and the other Promedico defendants of all charges.
Promedico states that the tax assessor’s arguments cannot remain as they were after the Supreme Court ruled that there had been no crime regarding the tax year being appealed, consequently the warrants were void. Promedico claims that the Income Tax Authority has no authority to reopen the tax assessment following the Supreme Court’s ruling. The Income Tax Authority’s acceptance of the appeal shows it accepts this argument.
It should be noted that tax assessments totaling NIS 11 million issued by tax assessor in the years after 1993 are still in dispute, and Promedico has appealed on this matter as well. Promedico’s attorney says that this matter will also “be solved or be thrown out.”
Published by Israel's Business Arena on 1 March 2001