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Israel's plan to keep tech giants from fleeing

Finance Minister Moshe Kahlon has announced a plan to slash Israel's 25% corporate tax to just 6% for such internet giants as Google and Facebook in a bid to keep the companies in Israel.
Ultra-Orthodox Jews take part in a protest against the operation of an Intel plant on the Jewish Sabbath in Jerusalem November 14, 2009. REUTERS/Baz Ratner (JERUSALEM BUSINESS CONFLICT RELIGION) - RTXQPS3

Representatives of the major technology firms in Israel refused to comment publicly on the decision announced July 14 by Finance Minister Moshe Kahlon to slash their tax rate to 6% from the normal corporate tax rate of 25%. Sources associated with Facebook and Google in Israel told Al-Monitor on condition of anonymity that they had been closely monitoring the decision and saw it as a positive move, but until such time as it becomes officially anchored in law, “it would not be responsible on our part to react.”

Kahlon’s decision suggests that the Finance Ministry understands that Israel must act quickly to resolve the issue of taxation on large and medium-sized tech companies to incentivize them to continue their operations in Israel.

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