Automated optical inspection equipment company Orbotech Ltd. (Nasdaq: ORBK) has reported to the US Securities and Exchange Commission (SEC) that it has received a demand from the Israel Tax Authority amounting to NIS 207 million ($58 million). Orbotech's share price fell sharply in the wake of its announcement.
The Israel Tax Authority carried out a comprehensive audit of Orbotech's reports for the years 2012-2014, at the end of which it issued the tax assessment. The company says that Tax Authority investigators raided its offices, examined documents and questioned employees, including senior managers.
Orbotech says that it believes its reports were correct, and that its tax advisors will examine the Tax Authority's assessment.
Orbotech's financial statements for the first quarter of 2017 showed a cash balance of $201 million at the end of the quarter, so that the Tax Authority's demand represents about a quarter of its cash reserves.
Orbotech said in a statement: "Orbotech has a professional disagreement with the Israel Tax Authority on matters of principle concerning several taxation issues. Implementation of the Tax Authority's stance on these issues is liable to involve the company in a large and unjustified expense, in disregard of accepted professional views and of many factors relating to the fact that Orbotech is a global company operating in many countries, at the same time as being unreservedly committed to the Israeli economy.
"Throughout the period in question, the company acted in accordance with the law and best practice in Israel and worldwide and, insofar as this was required, also in accordance with the opinion of taxation experts, and the company is therefore confident in its position and in the application of its policy resulting from that, as expressed in its financial results during the relevant years. The company intends to appeal against the tax assessment and the exhaust all means at its disposal. The company is cooperating with the Tax Authority in its investigation."
Published by Globes [online], Israel business news - www.globes-online.com - on May 23, 2017
© Copyright of Globes Publisher Itonut (1983) Ltd. 2017