preface

78
INVESTMENT INCENTIVES AND TRADE ADVANTAGES
Their cost includes installation and related expenses. For selfconstructed
or self-created assets, a determined reasonable
profit, at a rate fixed by law, may be added to the costs incurred.
The investment program should be completed within 5 years
from date of approval.
The grants are not deemed to be income but are deducted from
the cost of the fixed assets.
The terms stipulated by law for obtaining a grant are as follows:
1. The enterprise must be an industrial plant or a hotel.
2. The enterprise contributes to the independence of the State's
economy.
3. The enterprise is competitive and contributes to the gross
local product. An enterprise will be deemed to have fulfilled
this condition if it is engaged in the fields of biotechnology
or nano-technology and has obtained the approval of the
Head of Industrial R&D Administration to this effect.
Alternatively, an enterprise will be deemed to have fulfilled
this condition if exports amount to 25% of its turnover at
least. Where a plant has been expanded, an enterprise will be
deemed to have fulfilled this condition if its exports amount
to at least 25% of the increased turnover as compared to the
basic revenue. Nevertheless, an enterprise wishing to enjoy
the tax track at the same time required to export 25% of its
turnover.
An enterprise with "indirect exports" may, under certain
terms, also be deemed to have fulfilled this condition.
We must note, that under the grants program, is required to fund
24% of the scope of approved investment in equity.
BDO Israel