Israel’s diamond industry reached an agreement with authorities on a new law that exempts traders from paying taxes if they incur a loss.
One of the outcomes under the new regime is that diamond companies will be taxed on profit rather than revenue, the Israel Diamond Exchange (IDE) explained.
The IDE and the Israel Diamond Manufacturers Association finalized the deal December 18 following 10 months of negotiations with the Israel Tax Authority. The new terms are in line with international financial guidelines, potentially making the nation’s diamond sector more attractive to lenders, explained Yoram Dvash, president of the Israel Diamond Exchange.
“The previous tax agreement by which we paid tax on turnover even during years of losses is no more,” Dvash said. “This is an historic achievement – a win-win situation for Israel and for the diamond sector.”
The new tax law will also enable companies to deduct expenses from income before arriving at the final profit figure.