Sources informed Globes that, when it acquired the controlling interest in Tnuva Food Industries Ltd. in 2008, Apax Partners insisted on receiving a full tax exemption from the Israel Tax Authority on gains from a subsequent sale of the company, as a precondition. If Apax were to sell control of Tnuva today, the tax it would save on the deal is reportedly in the tens or even hundreds of millions of shekels. Since Tnuva's valuation has almost doubled within three years, the added value is around $1 billion.
Tax experts said that there is nothing unusual in granting a capital gains tax exemption to a foreign investor. They say that a foreign investor in an Israeli company is eligible for an exemption on the sale of the holding.
A Tax Authority source said that this has been its stated policy since 2008, in order to encourage foreign investment. "Even before then, exemptions were given to foreign funds that invested in Israel, subject to certain conditions," he said.