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Pay to go: Exporting Waze IP costs Google NIS 800m
ByELA LEVY-WEINRIB/ GLOBES
January 13, 2014 16:41
Google will pay NIS 800 million in taxes to transfer Waze's intellectual property to a tax haven.
Screenshot of Waze mobile navigation app

Screenshot of Waze mobile navigation app 370. (photo credit:Screenshot)

Google Inc. will pay the Israel Tax Authority an additional NIS 800 million on its acquisition of Waze Ltd. in order to export Waze's intellectual property, apparently move it to a tax haven. This will boost the tax payment on the Google-Waze deal to NIS 1.3 billion.


If this is the case, Google has recorded almost all of the expenses on the deal as intellectual property, which carries a 25% tax rate, in order to save tax expenses. In contrast to other companies, which have tried to register intellectual property as a separate company and subsequently export it severed from the original deal in order to avoid the full tax payment, Google accepted in advance the Tax Authority's position and paid the full tax rate on the export of Waze's intellectual property. The Tax Authority considers the file as a milestone for other companies seeking to make similar transactions in Israel.


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Google has not responded to the report, and the Tax Authority declined to respond for reasons of confidentiality.


Google acquired Waze in June 2013 for $1 billion. At the time of the deal, Google stressed that Waze's offices would stay in Israel, and that the company would be operated independently, in order to provide better information about traffic congestions to users.


"Nothing practical will change here at Waze," said Waze CEO Noam Bardin in a blog post about the deal. "We will maintain our community, brand, service and organization - the community hierarchy, responsibilities and processes will remain the same. The same Waze people will continue to collaborate with you, and we will continue to innovate our product and services, making them more social, functional and helpful for everyday drivers. Our employees, managers, founders and I are all committed to our vision for many years to come."



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