Teva says this figure includes NIS 2 billion in taxes that the employees of its suppliers and contractors pay annually.
Teva's activity in Israel generates more than NIS 3 billion in direct and indirect taxes a year including the dividend tax, which is estimated at NIS 750 million in 2012, said Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) in a statement today, in response to criticism about the taxes it pays in Israel, because of the tax breaks in the Law for the Encouragement of Capital Investments.. Teva employs more than 7,000 people directly who pay more than NIS 300 million in taxes a year; Teva is also linked with suppliers and contractors who employ more than 40,000 people in Israel, who pay around NIS 2 billion a year in taxes; Teva's exports from Israel in recent years are over NIS 18 billion a year.
As a result, Teva is one of the world's largest producers of life-saving drugs, compared with the country's population; Teva have invested in recent years more than NIS 1 billion a year, on average, in building plants and R&D facilities; Teva invests an average of NIS 2 billion a year in R&D and fostering innovative technology.
Teva president and CEO Dr. Jeremy Levin said, "Teva has paid and continues to pay taxes required by law. Since the Law for the Encouragement of Capital Investments was enacted, Teva has implemented the objectives and spirit of the law. We are proud of our conduct in this area, which has always been exceptional," said Levin.
"Over the years, Teva has accumulated billions of shekels in pretax profits, which are classified for tax purposes under the Law for the Encouragement of Capital Investments. Teva believes that, as a company based in Israel, these profits are not trapped at all, since most of them have already been invested in the development, construction, and expansion of Teva's operating infrastructure in Israel. Future profits will also be invested in this way.
"Teva's base is in Israel. Teva's efforts help the country every day, and we will continue to do so. We believe full-heartedly in the importance of supporting growth in Israel's periphery and development towns (such as the placing of Teva's strategic plants in Ramat Hovav and Jerusalem, in addition to facilities in Kiryat Shmona, Ashdod, Kfar Saba, and workers and facilities at sites in five other towns across the country)."
Levin continued, "The tax breaks awarded under the Law for the Encouragement of Capital Investments have helped ensure that Teva's production sites in Israel are constantly upgraded to meet the highest standards in the world, so that we can activity compete in global markets.
"We believe that the policy underpinning the Law for the Encouragement of Capital Investments helps build Israel's industrial foundations, of which Teva is a big part. This policy helps create incentives for enterprises in Israel and helps these enterprises support the country's growth, progress, and prosperity. In this way, this policy supports foreign investment in Israel and its national development."
Teva added, "Teva sees itself as committed to Israeli society. We recognize our commitment as one of the country's biggest companies, and we continue to invest in the community, people, and patients across Israel. Teva is built on the principles of social commitment, and we are proud to explain to the world how our corporate responsibility is based on our Israeli heritage. As part of this approach, Teva supports many activities in Israel and invests substantial financial resources in them. Furthermore, Teva encourages basic research in higher education, and helps keep brains in Israel. Just recently, Teva launched the National Network of Excellence as part of a unique program to support neurological research in Israel. The network's objective is to encourage the development of new drugs for the treatment of neurological and psychiatric diseases. The network will promote collaboration between research institutes, the best brains in Israel, and a wide range of medical centers in the country."
Published by Globes [online], Israel business news - www.globes-online.com - on February 17, 2013
© Copyright of Globes Publisher Itonut (1983) Ltd. 2013
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