Israel to Collect Up to $63 Million in Taxes on Altshuler Shaham Deal

Tax experts estimate that the Israeli government will collect between NIS 190 million and NIS 230 million (approximately $51 million to $63 million) in taxes from the landmark deal involving the acquisition of control of the investment house Altshuler Shaham. The transaction sees the insurance company Weshur acquiring a controlling stake in Altshuler Shaham, a deal that transfers NIS 145 billion in public savings and significantly reshapes the pension and provident fund landscape.

Tax attorney Yaniv Shekel estimates the tax revenue could reach NIS 230 million. He explains that the sellers' private holdings are managed through a joint holding company, Altshuler Shaham Ltd., meaning the primary tax will be a 23% corporate tax. Shekel anticipates the profit from the deal, after deducting transaction costs and the cost of shares, to be up to NIS 1 billion. With a 23% tax rate, this results in a tax of approximately NIS 230 million, assuming the share cost does not exceed NIS 100 million.

Benny Yona, a tax advisor and former head of the capital markets department at the Israel Tax Authority, projects the upper limit of the tax to be around NIS 190 million. He bases this on Altshuler Shaham Financials being sold for NIS 1 billion, with the seller, Altshuler Shaham Ltd., being a private company founded by the original owners. If the cost of shares is considered negligible, the taxable profit is approximately NIS 835 million, leading to an estimated tax of NIS 192 million at the 23% corporate tax rate.