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Tax benefits for hotel companies in Israel
Law to promote capital investment.
When an Israeli company owns or operates a hotel complex in Israel (hotel, boutique hotel, inn, etc.), the Israeli government may grant the following tax benefits:
- Reduced corporate income tax rate.
- Total exemption IS for a defined period.
- Accelerated amortization period. (This increases depreciation and reduces the structure's EBT).
- Preferential tax rate on dividends distributed to shareholders.
These benefits are granted for a period defined by law.
This period depends on the location of the resort.
As usual, the Israeli government wants to encourage investment and tourism on the periphery.
However, you should know that even investments in major tourist cities (Tel Aviv, Jerusalem, Ashdod, Netanya etc.) can qualify for certain grants.
Which companies are eligible?
In order to qualify for these grants, an Israeli company must, among other things, meet the following criteria:
- Be incorporated as a limited liability company. (Hevra Baam).
- The complex must include a minimum of 11 bedrooms.
- The complex must provide hotel services (accommodation, catering, leisure activities, etc.).
- At least 25% of overnight stays sold are to tourists.
- The company must make the investments stipulated by law, in the amounts stipulated by law.
Important to know
The administrative procedures involved in obtaining these benefits require knowledge of the Israeli environment, and of the various steps to be followed.
We strongly recommend that companies wishing to do business in the hotel sector in Israel contact our firm, in order to study the various options for obtaining the above-mentioned subsidies.
In fact, certain production conditions depend on the structure of the complex.
