Israel Combines Tax and Economic Incentives to Lure Investors

תקציר

Israel traditionally has been a high-tax country. Its current corporate tax rate is 40%. Dividends distributed from Israeli corporations are subject to 25% withholding tax. Nevertheless, a new effort to do away with red tape and recent developments in Israel have made it more attractive for a U.S. corporation engaged in a capital-intensive activity, such as manufacturing, to operate a plant or factory in Israel. These new incentives can result in minimal U.S. and Israeli taxes and allow corporations to receive cash grants of up to 38% of the amounts they invest in their Israeli operations.