Tel Aviv (TPS) – A torrent of Israeli taxes are about to hit the global tech giants Google, Facebook, Amazon, and eBay as new directives were announced on Monday by the Israel Tax Authority (ITA).
The new policy follows civil protests against the tax rate paid by the large corporations, including a burgeoning citizen “tax rebellion” and a giant protest blimp hovering outside Google’s Tel Aviv headquarters, which bore the succinct demand: “GOOGLE MUST PAY TAX.”
According to the new directives, foreign companies operating in Israel will have to pay 17% VAT (value added tax) as well as income tax on their Israeli commerce. Until now, those companies avoided the local taxes by conducting their business through offshore subsidiaries, such as Google’s offices in Ireland.
The brains behind the blimp was Guy Ofir, an attorney who petitioned the Supreme Court in 2013 to enforce taxation on Google, Amazon, and Facebook and who shelled out US $4,000 on the eye-catching zeppelin campaign.
“If you have a Hebrew website and you accept Israeli credit cards and target the Israeli market, then you are in Israel and have to pay taxes in Israel,” Ofir explained to Tazpit Press Service (TPS). “I honestly don’t care if you’re situated in Ireland or the Bahamas.”
Rather than float an inflatable complaint above the Tel Aviv skyline, though, some Israelis found other creative ways to protest the tax leniencies received by huge corporations. Tomer Avital, a social activist for government transparency, initiated a “legal tax rebellion” six weeks ago and has already recruited nearly 2,000 Israeli small businesses to his cause.
“I asked small businesses to join and rally together so we can use the same loopholes that big corporations get,” Avital told TPS, saying it might be possible to “register as a kibbutz” in order to pay a lower tax rate.
“We’re not going to evade taxes,” Avital explained. “We’re doing the same thing as Google and Facebook. We can easily avoid taxes by lying and cheating, but we want to pay taxes and to make a point—that the government should tax all of us equally.”
Ironically, the anti-Facebook tax rebels launched their revolt via Facebook. “I just wrote a Facebook status asking who wants to join my tax rebellion, and it really went viral,” Avital told TPS.
“We have issued these new guidelines in light of the mass expansion of commercial activity through the internet in recent years in Israel and in light of the move from traditional commerce to digital commerce,” stated an ITA spokesperson.
The new tax regulations have their critics, with some suggesting that significant taxation might scare off multinational corporations from Israel.
“It is possible that Check Point might have to leave Israel as a result of this tax burden. Although, I don’t want to do it and hope it [taxation] won’t happen,” Gil Shwed, founder and CEO of the Israeli tech giant Check Point Software Technologies, commented on Monday.
While Google Israel refused to comment on the subject, a laconic statement on the issue was made by Facebook today, reading: “Facebook pays taxes according to the law in every country it operates, including Israel.”
Jesse Lempel contributed to this report.