Final approval: the bill to encourage the high-tech industry in Israel

The Knesset plenum approved in second and third reading today (Tuesday) the bill to encourage knowledge-intensive industry, temporary order, 2023. It is proposed to establish by temporary order benefits for investors in Israeli hi-tech companies as well as benefits for companies for purchasing other companies or merging with other companies, whose intellectual property is registered in Israel and whose center of activity is in Israel. This arrangement is proposed, among other things, against the background of the expiration of the tax benefits established at the end of 2019

It is also proposed to extend the validity of the benefits provided under the Income Tax Ordinance in favor of investments in R&D companies that are issued on the stock exchange. According to the proposal, the benefits according to this law and according to the Income Tax Ordinance will remain valid until the end of 2026

In the explanatory notes to the bill, it is stated that “in recent years, the Israeli high-tech industry has maintained relatively good activity data, both at the investment level and at the salary level, in recent years, despite the economic crisis that hit the country due to the spread of the corona virus. Despite the aforementioned encouraging data, the competition between countries for the location of the activities of firms, especially in the field of technology, and for the location of recording their revenues, requires the allocation of resources to preserve Israel as an attractive destination for investments.”

Thus it is stated that for this purpose, and further to amendment No. 73 to the Law for the Encouragement of Capital Investments, which is intended to achieve a similar goal, “it is proposed to establish in this law benefits for investors in Israeli hi-tech companies as well as benefits for companies for the purchase of other companies or a merger with other companies, whose intellectual property is registered in Israel and whose center of activity is in Israel”.

Illustration. Photo: pixabay

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