"Globes" demands details on cos receiving tax breaks

"Globes" will petition the High Court of Justice if the Ministry of Finance continues to refuse to disclose the information.

"Globes" has demanded that the Ministry of Finance provide it with the list of prominent companies which have benefited for years from the Law for the Encouragement of Capital Investment, and the tax breaks given them each year. "Globes" deputy editor-in-chief Eli Tsipori filed the request in January 2013, under the Freedom of Information Law (5758-1998).

The Ministry of Finance has refused the request, claiming confidentiality under the Income Tax Code, even though the tax breaks are financed with public money.

NIS 5-6 billion in tax breaks a year are granted under the Law for the Encouragement of Capital Investment. Most of the money flows to a very small number of big companies, including, so far as is known, Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA), Israel Chemicals Ltd. (TASE: ICL), Iscar Ltd., Intel Israel Ltd., and Check Point Software Technologies Ltd. (Nasdaq: CHKP).

Israel Chemicals' financial reports state that it has received NIS 2.5 billion in tax breaks over the past five years. Teva reportedly received a NIS 2 billion tax break in 2009, and pays no taxes in Israel.

"Globes" will petition the High Court of Justice if the Ministry of Finance continues to refuse to disclose the information.

The Ministry of Industry, Trade and Labor discloses on its website a list of companies eligible for tax breaks under the "grants program" in the Law for the Encouragement of Capital Investment. These tax breaks are estimated at NIS 500 million a year. There is no reason for the law applying to grants to be different from the law applying to tax breaks under the Law for the Encouragement of Capital Investment.

The Israel Tax Authority said in response to "Globes'" letter, "The request is waiting for a legal opinion. The request relates to complex, sensitive, and extensive material, which requires proper reference and reference from the relevant parties."

Published by Globes [online], Israel business news - www.globes-online.com - on February 6, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

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