The cabinet today authorized the ministers of finance; justice; and industry, trade and labor to approve changes in the wording in the new law for encouraging capital investments. The changes will include replacing the 25% export threshold eligibility condition with the wording "a significant contribution to GDP."
The contribution will be measured in at least one of three ways: either most of the company's business must be in biotechnology or nanotechnology (preferred encouragement targets); revenue from sales in a particular market in each tax year must not exceed 75% of total sales (including the domestic market); and at least 25% of a company's sales must be in a market with at least 12 million residents (export markets, without setting them as a condition).
The change was made following Ministry of Justice reservations about the original wording in the law, as reported by "Globes" last week. Deputy Attorney General (economic affairs) Davida Lachman-Messer ruled that the export criteria in the original draft bill contravened international treaties to which Israel is a signatory, including the World Trade Organization convention, which forbids indirect subsidies of exports.
Published by Globes [online] - www.globes.co.il - on October 24, 2004
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