Which Corporation Gets the Biggest Tax Break in Israel? Teva

Intel Israel is next with a break of NIS 984 million in 2010 - less than half that of Teva.

Teva Pharmaceutical Industries and Intel Israel were the largest beneficiaries of corporate tax breaks in 2010 at around NIS 2.2 billion and NIS 984 million, respectively, according to recently published government reports analyzed by TheMarker.

The next two companies on the list were Israel Chemicals and Check Point Software Technologies, at NIS 380 million and NIS 282 million, respectively - putting the number for the top four at nearly NIS 4 billion.

These figures were found by cross-checking Finance Ministry and Tax Authority data on tax breaks for publicly traded companies from 2006 to 2011, and a report by the State Revenue Administration. The figures are based solely on tax incentives under the Law for Encouraging Capital Investment. Under that law, corporate tax can fall as low as zero if companies make large enough investments - not due to specially tailored tax agreements.

In 2009 and 2010, Intel paid no income tax due to incentives under the Law for Encouraging Capital Investment, but it currently pays 5%. Since, according to industry sources, the company's pretax profits were about the same in 2009 and 2010, Intel's tax breaks probably amounted to between NIS 1.5 billion and NIS 1.8 billion for the two years combined.

Over the last decade, Intel has also benefited from incentive grants worth NIS 1.3 billion for the NIS 10.5 billion it invested building and expanding its Jerusalem and Kiryat Gat plants. These grants were awarded as part of specially tailored agreements separate from the Law for Encouraging Capital Investment.

Sources close to Intel told TheMarker that the company pays more in corporate and dividend tax than it receives in incentives. These incentives have been provided to persuade Intel to continue investing in Israel instead of in Ireland, the sources said

Bloomberg