The Finance Ministry disclosed that Teva Pharmaceutical received an unprecedently huge tax break in the amount of 3 billion shekels, ending the Ministry’s repeated refusal to release the information, Globes reported on Tuesday.
The break—the largest ever given to a single Israeli company—was made possible under the Law for the Encouragement of Capital Investment.
The Israeli financial paper decried the tax preferentials given to Teva and other firms since the law was “scandalously amended in 2005.”
Amendment 60 of the law offers a “strategic track”, which allows Teva to benefit from a zero tax rate for ten years, including a zero tax rate on dividends. The amendment means that Teva will be exempt on almost all taxes on its profits through 2020. Over the decade, the tax break will total tens of billions of shekels, Globes charged.
It was also noted that the Ministry of Finance offered no estimates of the scale of the tax breaks under the 2005 amendment.
Globes said it will mount an appeal to the district court against the Ministry of Finance and Israel Tax Authority’s decision not to provide the newspaper data on the tax deals, even though the issue involves public money.
The Ministry of Finance said in response, “The data are not necessarily as presented, but the confidentiality duty stipulated in tax laws prevents us from providing details.”
Teva defended its conduct: “Teva has paid, and pays, taxes according to the law. Since the Law for the Encouragement of Capital Investment was enacted, Teva has applied the purpose of the law and its spirit. The law helps Teva greatly expand its investments in Israel, directly and indirectly, and today Teva operates in the periphery and development areas in Israel with thousands of employees in five more towns nationwide.