The Israeli diamond industry has finalised the terms of an agreement with the Israeli Tax Authority after 10 months of intensive negotiations.
Yesterday (Dec 18), the boards of directors of the Israel Diamond Exchange (IDE) and the Israel Diamond Manufacturers Association (IsDA) unanimously ratified the agreement.
The new tax agreement sets out terms for the Israeli diamond industry that are in line with international financial regulations.
One of the achievements of the agreement is that diamantaires will no longer pay taxes when they incur losses. Moreover, they will now be able to deduct all of their expenses from income and will pay tax only when they show a profit.
IDE president, Yoram Dvash, comments: “This is an historic achievement that will enable us to concentrate on growing the diamond industry. Over the past several months we worked in cooperation with the Tax Authority in total transparency. Our goal is to manage our books and to pay taxes like every other business in Israel. The agreement is truly a win-win situation for Israel and for the diamond sector, which supports thousands of families.”
Since the new tax agreement puts the diamantaires in compliance with international financial guidelines, expectations in the industry are that it will now become easier to access much needed lines of credit.
Yoram Dvash said that the new agreement greatly reduces the risk factor for the banks and that he expects a significant easing in bank credit. He said that he was confident that the Israeli banks that had sharply raised interest rates and had closed accounts of diamantaires would now welcome their business. Dvash added that he had received a promise by the government to endorse a freeing up of credit lines to the industry by the Israeli banks.
The agreement also enables diamantaires to participate in the “voluntary disclosure” arrangement, with special considerations for unique aspects of the diamond business.