The strengthening of the shekel against the US dollar has been a major blow to Israel's tech export industry. The 20% appreciation of the Israeli currency against the dollar over the past year has significantly eroded the revenue of local companies, while their main expenses — primarily salaries — are paid in shekels and continue to rise.
In this situation, tech giants Nvidia and Google have approached the Israel Tax Authority with a request to promote a move allowing taxes to be paid in dollars instead of shekels, in order to create operational stability and certainty. Globes has learned that additional companies have approached the Tax Authority with a similar request.
For the state, such a step may turn out to be a strategic move that will moderate the depreciation of the dollar, as it will reduce the existing demand in the market for the local currency.
As far as is known, the Tax Authority and the Ministry of Finance have not yet formulated a policy on the subject. The precedent for the request is the giant deal to sell Wiz to Google for $32 billion. There, as revealed by "Globes, "It was set that the company would pay the tax in dollars, without conversion to shekels.
The Tax Authority clearly understands the problem it has created with the Wiz precedent. International companies may go to court and give as an example of a precedent the exemption that the Tax Authority gave to Wiz to pay the capital gains tax on the exit in dollars. Therefore, it is estimated that the Tax Authority will agree to the request, even if only selectively towards large companies.
One of the biggest employers in Israel
Tech giants, and Nvidia in particular, are among the biggest employers in Israel, and their impact on the local economy is enormous.
Nvidia's revenue in Israel increased from $325 million in 2023 to $840 million in 2024 and $1.47 billion last year. The tax has paid in Israel amounted to $1.287 billion, or nearly NIS 4 billion.
Even if the Tax Authority requests are approved in principle, due to the impact of paying in dollars on the national debt, accountant general Michal Abadi-Boianglu will be the one to decide the issue.
The Tax Authority approved the decision on the payment of taxes in the Wiz deal in dollars about two months ago, and the tech companies are now seeking assistance from the state on this matter.