Intel takes $3 billion out of Israel, pays $450 million tax
Repatriated profits had nothing to do with recently passed Knesset law on 'trapped' corporate profits, sources tell TheMarker.
Intel Corporation paid dividend tax of 15% in late 2012 on $3 billion in corporate profits it repatriated from Israel, TheMarker has learned.
Intel and the Tax Authority secretly negotiated the applicable tax rate on exported profits made in Israel last year, Ministry sources told TheMarker.
The repatriated profits had nothing to do with recently passed Knesset law on 'trapped' corporate profits, sources tell TheMarker. In any case Intel intends to continue investing in its Israeli operations, so the issue of taking profits made locally out of the country to be used elsewhere is less of an issue for it than, perhaps, to other multinationals with Israel operations.
Top executives at Intel Israel kept the company's global headquarters abreast of the talks. In the end, Intel paid its tax bill in two installments in late 2012.
In addition to the dividend tax payout, Intel paid a 30% tax on retained earnings last Ocrtober – giving the state $133 million on of $450 million worth of so-called "trapped profits".
However in any case, Intel has stated in the past that it plans to continue investing in its Israeli operations: ergo it doesn't plan to export its trapped profits even now that the tax issue has been regulated in law.
Intel Israel stated that it complies with its tax obligations as set by law. Because Intel Israel is a private subsidiary company, it doesn't provide financial statements to media.
In 2011, Intel Israel's exports reached $2.2 billion and its final export figures for 2012 are expected to be even higher.