Knesset approves ‘trapped profits’ law
Bill to release "trapped profits" of multinational corporations passes, set boost state revenues by NIS 3 billion next year.
The 18th Knesset votes to dissolve itself Photo: Marc Israel Sellem/The Jerusalem Post
The Knesset approved the second and third readings of a bill to release the
“trapped profits” of multinational corporations by 38 votes to 21 Monday, in a
move the government says will boost state revenues by NIS 3 billion next
Until now, the Law for the Encouragement of Capital Investment has
exempted certain multinationals from paying company and dividend taxes, as long
as they invest their profits in further activities in Israel.
amendment, corporations will be permitted to release part of their trapped
profits for investment abroad as long as they agree to allocate at least half of
the profits to investments inside Israel. In return, the state will charge them
a reduced company tax rate of 6 to 17.5 percent.
Finance Minister Yuval
Steinitz thanked the Knesset for showing “maturity and responsibility” in the
face of what he called “populist criticism.”
Had it not approved the
bill, he added, the government would have been forced to collect billions from
its own citizens instead.
Opposition MKs slammed the government over the
law, with Meretz Chairwoman Zehava Gal-On calling it “a gift for tycoons,”
Shlomo Molla (Kadima) branding it “a slap in the face,” Majallie Whbee (Kadima)
describing it as “an insult to the intelligence of the public,” Nitzan Horowitz
(Meretz) naming it “the law of the burglars,” and Dov Khenin (Hadash) labeling