preface

74
INVESTMENT INCENTIVES AND TRADE ADVANTAGES
income generated from January 1, 2011 onward. (For details of the
previous law’s provisions - see “Doing Business In Israel 2010”).
The Law offers business enterprise promoters two types of tax breaks,
under the tax benefits tracks or grants track (applicable in Zone A only).
It should be noted that the 2011 Amendment prescribes that enterprises
may enjoy both tracks simultaneously (in contrast to the previous law,
whereby a company could not benefit from both courses at the same
time).
Under the tax benefits track, an enterprise which qualified for this was
granted a "beneficiary plant" status under the previous "preferable plant"
law, while under the new law and grants track, such enterprise is given
the status of "approved plant".
The Law applies to industrial enterprises (in diverse branches such as:
textiles, food, electronics, chemicals, pharmaceuticals, computer
software, biotechnology, nanotechnology, renewal energies R&D etc.),
hotels and other tourism ventures (1) , industrial and residential
construction, etc. (hereinafter collectively referred to as “Enterprises”).
Based on a broad view of the Israeli labor force, R&D potential and the
desire to maintain professional and advanced workers within its borders,
the Law also applies to industrial development centers located in the
country. These can enjoy the full benefits granted by the Law, although
they may not necessarily comply with the generally accepted definition
of “industry”. Industrial R&D for a foreign resident will be recognized
as industrial activity if approved by the Head of Industrial R&D
Administration.
It should be noted that a key condition for enjoying the benefits is
compliance with an export rate of at least 25% of the industrial
enterprise’s turnover as outlined below.
7.2.2. Tax Benefits Track
In the framework of the 2011 Amendment, all the existing tax benefits
were canceled and a unified tax rate introduced on the aggregate
revenue generated from manufacturing activity, for industrial enterprises
complying with the minimum export conditions established.
(1) Hotel and other tourism ventures remines under the preiouse law orders.
BDO Israel