Israel Chemicals subsidiary Dead Sea Works enjoyed tax breaks amounting to $691.2 million between 2008 and 2012, while paying the state mining royalties amounting to only $408.5 million, the company's financial records revealed. Dead Sea Works is a division of ICL Fertilizers, and is the world's fourth largest producer and supplier of potash products. The details concerning the company's finances were revealed last week after the Movement for Quality Government in Israel and the Israel Union for Environmental Defense petitioned the Supreme Court to have records concerning an arbitration proceeding held between the state and ICL be made public. The case dates back to 2011, when the state sued the company, demanding it pay an additional $291 million in royalties. The state's demand was based in ICL's reported revenue for 2008-2011, which amounted to $6.63 billion. At the time, the company's royalty payments to the state came to $408.5 million -- only 6.2 percent of its profits. Over the past decade, ICL had drawn dividends amounting to $3.8 billion. Israel's State Land and Property Law of 1951 stipulates that natural resources, such as water and mineral deposits, belong to the public and the government serves as their trustee. The Mining Code, originally enacted in 1925 under the British Mandate, was incorporated into the law and states that the government can license private companies to mine and trade in these resources, in exchange for a certain percentage of the profits. Founded in 1952, Dead Sea Works was awarded an exclusive Dead Sea quarry franchise in 1961. The license will expire in 2030. Throughout the legal proceedings and the subsequent court-ordered arbitration, ICL and Dead Sea Works claimed, "The state has had ample opportunity over the years to change the way the royalty payments are calculated. The fact that it has never before sought to do so raises questions." According to the records released, Finance Ministry Accountant-General Michal Abadi-Boiangiu told the court that every shekel withheld from royalty payments has been "taken from the public."
'ICL enjoyed $691 million tax break over 5-year period'
Records in arbitration proceeding between Israel Chemicals and the state over Dead Sea Works royalties dispute reveal company paid $408.5 million in royalties between 2008 and 2012 -- only 6.2% of $6.63 billion revenue.
Load more...