Israeli corporate taxation lowered

The Knesset Finance Committee has agreed that corporate taxation will be lowered to 12% for high-tech companies in central Israel and 8% for all the companies meeting the criteria in the Law for the Encouragement of Capital Investments that are located in outlying areas, including Jerusalem. The Ministry of Finance welcomed the committee's decision, which must still be passed by a vote of the committee.

Manufacturers Association of Israel president Shraga Brosh, who demanded that the tax be reduced to 12% on all companies in central Israel and 6% on companies located in outlying areas, reacted angrily to the decision. He said it was scandalous, adding that he was calling on his fellow manufacturers to leave Israel. He left the committee room after making his comments.

The Ministry of Finance is also agreeing to provide special NIS 50 million in grants for encouraging high-tech to the Jerusalem and Beersheva municipalities.

The Finance Committee's discussions of the Economic Arrangements Bill for the next two years are continuing in full force, and at this stage are awaiting a decision on a number of key issues involved in the bill. The issues still to be decided include the committee's decision on taxation of people owning three or more housing units, which is arousing strong opposition among the MKs. Minister of Finance Moshe Kahlon, however, who regards the proposal as his flagship proposal, is giving it his full backing, and is even willing to break up the coalition over it.

Published by Globes [online], Israel business news - www.globes-online.com - on December 15, 2016

Israeli corporate taxation lowered

Companies Tax will be lowered to 12% on high-tech companies in central Israel.