JERUSALEM (Reuters) - Israel may have to make adjustments to its corporate tax rate, Finance Minister Moshe Kahlon said on Saturday in response to a tax slash approved by the U.S. Senate.
U.S. President Donald Trump said the U.S. tax overhaul could cut the corporate tax rate from 35 to 20 percent once the Senate and House of Representatives reconcile their respective versions of the legislation.
The corporate tax rate in Israel is to be reduced this month from 24 to 23 percent. But a lower, more attractive, rate in the United States could lead Israeli companies to consider moving there.
“We will receive all the details from our companies abroad about the tax reform and we must address it,” Kahlon told Channel 10’s weekly politics show Hamateh. “What the danger is of companies here packing up and moving there? There are many implications. We will have to make adjustments.”
Many Israeli high-tech companies have operations in the United States but research and development centres in Israel.
Israel’s technology industry is one of the world’s largest behind Silicon Valley, accounting for about 14 percent of the country’s economic output, 50 percent of industrial exports and about 10 percent of its workforce.
Reporting by Maayan Lubell; Editing by Stephen Powell