|The Israel Diamond Institute (IDI) reports that a new agreement has been reached between the Israeli diamond industry and the Israeli tax authorities. As part of the new arrangement, diamantaires will no longer pay taxes when they incur losses, says the IDI. Additionally, they will now be able to deduct all of their expenses from income and will pay tax only when they show a profit.
Commenting on the new arrangement, Israel Diamond Exchange (IDE) President Yoram Dvash says, "The previous tax agreement by which we paid tax on turnover even during years of losses is no more. From now on we will be able to deduct our many expenses and we will pay tax only on profits."
The full text of the IDI announcement follows below:
After Months of Negotiations, Israel Diamond Industry Reaches New Agreement with Israel Tax Authority
Yoram Dvash: This is an historic agreement that will enable us to concentrate on growing the diamond industry
Ramat Gan, Israel, December 18, 2016: After months of intensive negotiations the Israeli Diamond Industry has finalized the terms of an agreement with the Israeli Tax Authority. Today the boards of directors of the Israel Diamond Exchange (IDE) and the Israel Diamond Manufacturers Association (IsDA) unanimously ratified the agreement. A special assembly of IDE members today also endorsed the new arrangement.
The new tax agreement sets out terms for the Israeli Diamond Industry that are in line with international financial regulations. The arrangement was achieved over a ten-month period of negotiations.
One of the achievements of the agreement is that diamantaires will no longer pay taxes when they incur losses. Moreover, they will now be able to deduct all of their expenses from income and will pay tax only when they show a profit.
IDE President Yoram Dvash said, "The previous tax agreement by which we paid tax on turnover even during years of losses is no more. From now on we will be able to deduct our many expenses and we will pay tax only on profits."
He added: "This is an historic achievement that will enable us to concentrate on growing the diamond industry. Over the past several months we worked in cooperation with the Tax Authority in total transparency. Our goal is to manage our books and to pay taxes like every other business in Israel. The agreement is truly a win-win situation for Israel and for the diamond sector, which supports thousands of families."
Since the new tax agreement puts the diamantaires in compliance with international financial guidelines, expectations in the industry are that it will now become easier to access much needed lines of credit. Yoram Dvash said that the new agreement greatly reduces the risk factor for the banks and that he expects a significant easing in bank credit. He said that he was confident that the Israeli banks that had sharply raised interest rates and had closed accounts of diamantaires would now welcome their business. Dvash added that he had received a promise by the government to endorse a freeing up of credit lines to the industry by the Israeli banks. The agreement also enables diamantaires to participate in the "voluntary disclosure" arrangement, with special considerations for unique aspects of the diamond business.