The Minister of Finance Signs Regulations for Bringing Forward the Collection with Respect to the Levy on Oil Profits
The Minister of Finance, Dr. Yuval Steinitz, has currently signed the Regulations for the Taxation of Oil Profits (Advances on Account of the Levy for the Years 2011 to 2012) (Ad Hoc Provision), 2011, which provide for a compulsory payment of advances with respect to a levy that is payable by virtue of the Taxation of Oil Profits Law, 2011, which adopts the recommendations of the Sheshinski Committee.
The Law, which came into effect on April 10 this year, imposes the payment of a levy on the holder of an oil right in an oil venture, at the rates prescribed in the Law, and authorizes the Minister of Finance to promulgate regulations concerning advances on account of the levy.
According to the Regulations, the holder of an oil right that is liable for the levy under the Law will pay advances on account of the levy for the same year. Since the Regulations will come into force upon their publication, the payment of advances for 2011 will be made as early as November-December of this year instead of in mid-2012.
The advances have been set at a rate that will not fall below 8% of the current receipts in 2011 and 13% of the current receipts in 2012, this being based on the comprehensive work performed by a professional team within the Tax Authority, which has examined the applicable data for determining the advances. The advances are expected to contribute significantly to the income of the State Treasury.
The Minister of Finance,
Dr. Yuval Steinitz
, said that: “these Regulations will increase the State’s income from oil profits, pursuant to the adoption of the conclusions of the Sheshinski Committee, which had been established at my initiative. This will secure the public’s share in its proprietary natural resources.”
