JERUSALEM, Nov. 2 (Xinhua) -- Israel announced on Sunday a comprehensive reform in high-tech taxation aimed at boosting investment, reducing bureaucracy, and encouraging skilled professionals abroad to return home, according to a joint statement issued by the Finance Ministry, the Tax Authority, and the Israel Innovation Authority.
The reform seeks to increase tax certainty, remove barriers for investors, and support the continued growth of Israel's hi-tech sector.
Under the new framework, multinational companies will find it easier to operate in Israel, acquire local technology firms, and manage research and development centers in the country.
The plan also introduces incentives for investment funds and venture capital, featuring simpler taxation rules and greater transparency. A uniform income tax rate will apply to carried interest for both Israeli and foreign funds, while Israeli funds will be exempt from value-added tax (VAT) on carried interest.
Foreign investors will also be exempt from capital gains tax on direct investments in Israeli hi-tech companies, regardless of investment size or local presence.
To attract skilled Israelis working abroad back to the country, the reform includes tax exemptions on income earned overseas and credits for foreign taxes already paid.
According to the joint statement, the overhaul is designed to make Israel more competitive globally, foster innovation, and solidify its position as a leading hub for technology and entrepreneurship. ■
