Reduced tax for international companies in Israel

The Israeli Knesset (parliament) on Monday authorised a bill allowing international companies to pay reduced tax rates if they invest half of their profits in Israel.

Xinhua news agency reports that the law, which has the support of Prime Minister Benjamin Netanyahu and Finance Minister Yuval Steinitz, is known as "locked profits law."

International companies in Israel have up until now enjoyed tax breaks on the condition that they pay back the money they made in Israel.

However, if the companies choose to take their profits outside of Israel's borders, the companies would have to pay a tax rate of 25 percent on revenue.

The new law is expected to enable companies to unfreeze much of their revenue and obtain a larger tax break. The tax rate could be as low as 6 percent of the revenues.

The law has caused a stir among left-wing and social justice activists who protested the tycoons' control over the Israeli market.

Social justice activists are planning to have a protest on Saturday in the hopes of influencing the upcoming Jan 22 elections.

Last year, hundreds of thousands of Israelis took to the streets to protest high cost of living in the country, close ties between tycoons and government officials and the monopoly of a few families on the Israeli market.