"The tax on a company like ours has risen from 12% to 16%. There is nothing like it in any industry in the country," said NICE Systems Ltd. (Nasdaq: NICE; TASE: NICE) president and CEO Zeevi Bregman yesterday, taking the opportunity of the publication of the company's financial report to lambast the Ministry of Finance's austerity measures in the Economic Arrangements bill, which are due to come into effect in 2014.
"This isn't about NICE; it should be realized that the tax on companies like ours in Europe is 10%. The moment that Europe clearly becomes more attractive in tax terms than Israel, there will be long-term consequences. It seems to me that people don’t understand the significance of this."
NICE is not classified as a "strategic company", which would make it eligible for tax breaks similar to those of Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) and Intel Israel Ltd., but is classified as an "authorized enterprise" for tax purposes.
Commenting on the decision by Mellanox Technologies Ltd. (Nasdaq:MLNX; TASE:MLNX) to delist from the TASE because of regulations, Bregman said, "Regulation in Israel is very disruptive; it certainly doesn’t help. Once US law was enough for Israel, but since Amendment 16 and Amendment 20, we face double regulation, which makes the company's work more complicated and difficult. The advantages of a dual listing are no longer great, and it's much more logical for us to be listed only on Nasdaq." He added, however, "We are not considering leaving the TASE at the moment."
"The combination of taxes and extra regulation creates an anti- hightech atmosphere," concluded Bregman.
Published by Globes [online], Israel business news - www.globes-online.com - on August 8, 2013
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