Wix CEO Avishai Abrahami Sues Accountant Over Costly Tax Advice Dispute
Avishai Abrahami, co-founder and CEO of Wix, has filed a lawsuit against his accountant Gil Sultan, accusing him of negligent tax advice that led to excessive tax payments. Abrahami claims Sultan advised him to invest in startups through a company he owns, Clover Holdings, rather than personally, without warning him of the resulting double taxation. According to Abrahami, this advice caused him to pay corporate tax and dividend tax on the same funds, instead of a lower single tax, resulting in overpayment and anticipated future liabilities amounting to tens of millions of shekels.
Sultan denies these allegations, stating that he and his company were only contracted for accounting services, not tax advice, and that Abrahami had received tax guidance from Ernst & Young prior to his investments. Sultan also argues that Abrahami was aware of the double taxation issue and personally chose to invest in most cases, contradicting the claim that he followed Sultan's advice. This lawsuit follows two previous legal proceedings between the parties, including a dismissed suit by Abrahami against Sultan due to unestablished damages at the time.
Wix was founded in Israel in 2006 and went public on NASDAQ in 2013. Between 2010 and 2021, Sultan provided accounting and tax services to Abrahami and Clover. The dispute centers on a "tax trap" allegedly created by Sultan's advice, which Abrahami says caused him to pay an excess tax of 111,000 shekels so far. Abrahami established Clover Holdings in 2010 to receive a significant stock option package from Wix and began providing services through Clover instead of as an employee.
Abrahami's legal team asserts that Sultan's instructions to channel personal funds into Clover for investments created unnecessary tax liabilities. Sultan's lawyers characterize the lawsuit as a baseless attempt to intimidate in response to a separate large lawsuit filed against Abrahami and his brother, which is currently under court confidentiality. They emphasize that a prior similar suit was decisively rejected by the district court, which found Abrahami artificially created losses to justify litigation.
Abrahami's office stated the new lawsuit is based on clear facts and documents proving negligent tax advice, and they expect the court to hold Sultan fully accountable. Sultan's legal team maintains the case is unfounded and destined for dismissal. The dispute highlights ongoing tensions over complex tax planning and investment structures involving high-profile Israeli entrepreneurs.
