Business in Brief

Israel weighing how to comply with U.S. tax reporting requirements 

The Finance Ministry has assembled a team to investigate the implications of a new U.S. law that requires Israeli financial institutions to report on accounts they manage for clients, including Israeli citizens, who are obligated to file tax U.S. tax statements. The U.S. Foreign Account Tax Compliance Act is aimed at preventing Americans from avoiding tax by keeping money in overseas accounts. The law requires U.S. citizens and anyone holding a green card to report financial assets in excess of $50,000 every year. Foreign financial institutions must provide information directly to the U.S. tax authorities. They have until June 2013 to make arrangements to comply with the law. (Moti Bassok)


Egg prices due to rise 16% to NIS 14 a dozen as feed costs rise

Egg prices will rise 16% shortly, said Moti Elkabetz, the secretary of the Poultry Growers Association. That would mean that the average price for a carton of a dozen eggs would increase by NIS 1.40, to about NIS 14. Almost all eggs sold by retail chains - 98% - are subject to government price controls. Organic eggs are exempt from price controls and generally sell for between NIS 18 and NIS 23 a dozen. Elkabetz said about two thirds of the expected price rise would be due to higher feed costs, which have been climbing globally. He said prices for corn and soy have risen 40% and constitute a major part of farmers' poultry expenses. (Amiram Cohen)


Leumi shareholders approve pay raise for chairman
Bank Leumi shareholders voted yesterday to raise the salary of the bank's chairman, David Brodet, despite pleas by the government and a group of pension fund investors opposed to the move. Otzar Hityashvut, which was the bank's original shareholder but whose stake is now just 4.9%, also opposed the salary increase. Brodet, whose compensation cost the bank NIS 3.1 million last year, will get a 3.7% salary rise retroactive to the start of this year, Leumi said. The government also lost out in a vote for a seat on the board of directors. It supported the election of accountant Ziad Abu Habla, who would have been the first Arab to sit on Leumi's board, but the bank's institutional investors supported other candidates. (Sivan Aizescu)
Car sales rise amid fears of VAT hike

Fears that the value-added tax would be raised starting in August prompted a surge of automobile purchases last month, with importers reporting deliveries of 19,565 vehicles, 1,300 more than in June. VAT will go up by 1% September 1, to 17%, because the Knesset refused to approve the rise until then. For the year, automobile sales remain weak. In the first seven months, sales were down 8.9%, to 129,957. Hyundai continued to lead the market in July, with deliveries of 2,460 vehicles and 20,430 for the year to date. Ford was second, but its deliveries were up 113% on the year, thanks to brisk sales of the Focus family car, which has turned into this year's best seller. Kia was in third place, with 112,316 deliveries in the first seven months, a rise of 34% from 2011. (Daniel Schmil)