The Israel Diamond Exchange (IDE) and the Israel Tax Authority have signed a deal that will eliminate the minimum income threshold for diamond dealers.
Under the agreement, participating traders will know their taxable income at the start of each year, as the authority will calculate it using a fixed, low percentage of turnover, the IDE said Sunday. The arrangement also removes the minimum deemed income requirement, under which dealers had to report a high income level even when business activity was limited.
With Israel seeking to reestablish itself as a trading center, the contract, valid from 2027 to 2028, positions the country as a competitor to Belgium and Dubai, the IDE said.
In Belgium, taxable income is set at 2.1% of turnover, more than three times the rate in Israel. Gemstones and jewelry can also enter Israel duty-free, compared with a 5% tariff in Dubai. In addition, foreign companies can register in Israel relatively quickly and by non-Israeli nationals, while the process in Dubai can take more than a year.
The agreement stems from an initiative by former IDE president Nissim Zuaretz, who made the issue a top priority. Zuaretz worked with the Israel Tax Authority and the Finance Ministry over an extended period to secure the deal. The agreement also fulfills a commitment by finance minister Bezalel Smotrich, who said about two years ago that he would work to strengthen the diamond industry. A team led by IDE vice president Aviad Bashari and CEO Nadav Sheinberger, together with Karim Kanaan, chief of staff to the director of the Israel Tax Authority, created the deal.
“The agreement is the result of a thorough and professional process in which we examined every parameter together with the Israel Tax Authority team, comparing it with the models used in Belgium and Dubai,” said Sheinberger. “The result is a simple, transparent and stable arrangement that gives diamond dealers certainty in advance and removes obstacles that have burdened the industry for years. We will work to make the arrangement accessible to diamond dealers in Israel while presenting it to leading diamond companies worldwide and assisting foreign companies that choose to establish operations at the Israeli bourse.”
Image: The Israel Diamond Exchange. (Shutterstock)
