Nvidia to Pay $2.6 Billion in Israeli Corporate Tax, Double Last Year's Amount
Translated & summarized from NEWSru Israel by baba
Nvidia is expected to pay about $2.6 billion in Israeli corporate taxes this fiscal year, double the $1.29 billion paid last year. The tech giant's Israeli tax payments are largely due to its acquisition of Mellanox and its networking business developed in Yokneam. Nvidia benefits from a reduced tax rate in Israel, saving billions annually, but a new 15% minimum tax could significantly increase its future payments. Any additional tax due to the new minimum is not expected until 2027 or 2028.
The story in 6 lines · by baba
- Nvidia's projected Israeli corporate tax payment of $2.6 billion is double the $1.29 billion paid last year.
- Israel is the only foreign country itemized separately for tax payments in Nvidia's annual report.
- The majority of Nvidia's Israeli tax liability stems from its acquisition of Mellanox in 2020.
- Nvidia likely benefits from a special 6% tax rate on intellectual property profits in Israel.
- A new 15% minimum tax in Israel could increase Nvidia's future tax payments significantly.
- Any additional tax payments from the new minimum tax are not expected until 2027 or 2028.
Nvidia is projected to pay approximately $2.6 billion in corporate income tax in Israel during the current fiscal year, which concludes at the end of January. This represents a significant increase from the $1.29 billion (around 4 billion shekels) paid in the fiscal year ending January 2026. These figures are detailed in Nvidia's annual report, which for the first time itemized tax payments by country, singling out Israel as the only foreign nation. All other countries outside the U.S. accounted for $156 million of Nvidia's total tax payments of roughly $20.3 billion.
The majority of Nvidia's Israeli tax payments stem from its acquisition of Mellanox in 2020 for approximately $6.9 billion. Mellanox continues to operate as an Israeli company, making its profits taxable in Israel. Additionally, Nvidia pays taxes on transfer pricing for products developed in Israel but generating revenue elsewhere.
Nvidia's tax contributions in Israel are seven times larger than those of Intel. The company's pre-tax profit was about $141 billion last year and nearly reached that figure in the first half of the current year, with projections for the full year between $290 billion and $300 billion. Nvidia's Israeli profits are primarily linked to its networking business, largely developed in Yokneam, which generated about $31.4 billion last year and $32.3 billion in the first half of the current year.
At its current growth rate, Nvidia's Israeli tax payments could reach $3.2 billion. However, Nvidia benefits from a significantly lower tax rate in Israel than typical companies, likely due to its status as a "special priority technology enterprise." This status reportedly grants a 6% tax rate on intellectual property profits created in Israel, compared to the standard 23%. This reduced rate saved Nvidia approximately $3.06 billion last year, with other Israeli factors contributing an additional $1.6 billion, resulting in a total tax reduction of $1.46 billion for Nvidia in Israel.
Since early 2026, Israel has implemented a 15% minimum tax for large multinational corporations as part of a global OECD reform. If Nvidia's effective tax rate in Israel rises to around 15%, its current year's income tax could be an estimated $5.5 billion to $7 billion. However, any additional payment would not reach the treasury until 2027 or 2028, and a substantial portion might be recouped through tax credits for R&D expenses under a new law enacted in March 2026.
