Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) today announced that it will pay NIS 336 million ($91 million) in taxes under Amendment 69 to the Law for the Encouragement of Capital Investments (the so-called "trapped profits"), and is considering paying an additional amount by November. The law currently permits an Israeli company to use tax-exempt profits accumulated prior to the end of 2011 for dividends, as long as certain reduced taxes are paid.
"Teva has always complied with the law and its spirit. During the company's 110 years, with the help of the law, we have contributed much to the country's economic growth, and we will continue to do so in the future," said Teva president and CEO Jeremy Levin. "We intend to discuss with the Ministry of Finance about the concept and vision guiding proposed changes in the law. Teva is a strong and profitable multinational company and a national asset for the State of Israel."
Pursuant to a recent amendment to the Law for the Encouragement of Capital Investments, which became effective on November 12, 2012, a company that elects by November 11, 2013, to pay a corporate tax rate as set forth in that amendment (rather than the regular corporate tax rate applicable to approved enterprise income) with respect to undistributed exempt income accumulated by the company up until December 31, 2011, will be entitled to distribute a dividend from such income without being required to pay additional corporate tax with respect to such dividend. A company that has so elected must make certain qualified investments in Israel over the five-year period commencing in 2013. A company that has elected to apply the amendment cannot withdraw from its election
Published by Globes [online], Israel business news - www.globes-online.com - on May 30, 2013
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