Israel Diamond Exchange Signs New Tax Deal to Boost Competitiveness

The Israel Diamond Exchange and the Tax Authority have signed a new tax agreement for the diamond industry, effective from 2027 to 2028. Under this voluntary agreement, participating diamond dealers will have their taxable income determined in advance at a fixed rate of 1.3% of their turnover. The agreement also stipulates that diamond dealers will not be required to report minimum income in years where their actual income falls below this threshold. The Diamond Exchange stated that this deal aims to enhance Israel's competitiveness against major global diamond centers like Belgium and Dubai. Currently, Israel imports gemstones and jewelry duty-free, while Dubai imposes a 5% customs duty. This agreement comes amid a significant decline in Israel's diamond sector, an industry that has historically been a cornerstone of the local economy. According to the Central Bureau of Statistics, diamond processing exports fell to $3.6 billion in 2025, down from $4.9 billion in 2024, $6.4 billion in 2023, and $9.2 billion in 2022. This downward trend continued into the first half of the current year, with net polished diamond exports from Israel dropping by approximately 22.3% to $626 million compared to the same period last year. Historically, diamonds were a primary export for Israel, alongside oranges, in the early years after the state's establishment. While Israel remains a significant player in the global diamond market, its influence has waned, with Belgium and India experiencing growth. Global industry analyses indicate that Belgian and Indian polished diamond exports are now two and three times larger, respectively, than Israel's. The lab-grown diamond industry in Israel, once seen as a potential growth engine, has also faced severe challenges. LUSIX, founded by Beny Landa, which raised around $150 million from investors including LVMH's investment arm, encountered difficulties in 2024 due to a sharp decline in global lab-grown diamond prices. LUSIX's revenues, which were $22.8 million in 2021, have significantly shrunk, and the company was sold for only $4 million.

Nissim Zuaretz, President of the Diamond Exchange, described the agreement as a "historic turning point" for the Israeli diamond industry, aiming to restore Israel's position as a leading global trade center. He emphasized that the deal provides certainty and stability for Israeli diamond dealers and places the Ramat Gan exchange on par with Antwerp and Dubai. Nadav Scheinberger, CEO of the Diamond Exchange, added that the agreement is the result of extensive professional work, comparing parameters with models used in Belgium and Dubai, leading to a simple, transparent, and stable arrangement that offers full upfront certainty and removes long-standing barriers for the industry.