Israel’s Tax Authority Has Lost Its Bite

Why should companies pay tax on so-called trapped profits when the tax authority has shown that it won’t go after them?

In a critique of the Encouragement of Capital Investments Law, the state comptroller cites a slew of numbers accompanied by charts. One interesting figure is the tax take on so-called trapped profits – corporate earnings that aren’t taxed because they haven’t been paid as dividends. The interesting figure is NIS 1 billion, just one-third the amount expected with less than a month to...