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The royalties that Israel receives on Israel Chemicals' potash mining operations are neither extremely high nor extremely low, according to a comparative study by the Finance Ministry. Israel's take is higher than Britain's and Spain's, but less than Canada's.

ICL pays the government 5% in royalties on its first 1.5 million tons of potash sales every year, and 10% on sales beyond that. In contrast, royalties in Spain and Britain, where ICL also produces potash, are only 2% to 3%.

But in Canada, home to ICL's largest competitor - Potash Corporation of Saskatchewan - the official royalty rate is 21%. The amount paid in practice is much lower: The Canadian government encourages potash mining by deducting companies' investments from royalty payments.

Corporate taxes on profits also come into play when calculating the potash companies' overall contribution to government coffers. The statutory rate in Israel this year is 25%, which is the same as in Britain, while in Spain it is 30% and in Canada 27% - so the tax rates don't change the overall picture very much.

But the comparison becomes complicated when considering the great differences between statutory tax rates and taxes actually collected. For instance, while Israel's corporate tax rate was 24%, ICL paid only 12% due to benefits under the Law for the Encouragement of Capital Investment.

When considering both the statutory tax rate and royalty rates, Israel is comfortably situated between Britain and Spain on the low end, and Canada on the high end. This means Israel is receiving a reasonable take from ICL's sales, since it wouldn't want to hurt the company's competitiveness.

Another important factor is that Israel's potash production costs are much lower than in the rest of the world. This is because the potash is extracted from brines from the Dead Sea, whereas elsewhere it is produced from underground mines. This gives ICL very large gross margins, which have been reflected in the company's enormous profits over the past several years - around $1 billion a year. In light of this, just like the Sheshinski Committee imposed tax on the natural gas companies' "excess profits," ICL could also be taxed based on excess profits, and the government will probably need to address this in the future.