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Israel Introduces New Tax Regime for Diamond Traders
The Israel Diamond Exchange and the Tax Authority have signed a historic tax agreement for the diamond industry, set to take effect for the years 2027 to 2028. The deal aims to restore Israel's position as a leading global diamond trading center and reverse the trend of companies relocating to rival hubs like Antwerp and Dubai.
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What happened
- 01The Israel Diamond Exchange and the Tax Authority signed a historic tax agreement for 2027-2028 to boost global competitiveness.
- 02The agreement establishes a fixed, low tax rate based on a percentage of turnover, providing dealers with predictable tax liabilities.
- 03The deal eliminates the minimum income floor that previously forced diamond merchants to report high earnings during low activity.
- 04Israel's new tax rate is more than three times lower than Belgium's rate of 2.1% of turnover.
- 05Gemstones and jewelry will enter Israel duty-free, contrasting with a 5% tariff imposed in Dubai.
- 06The reform aims to reverse a decline in the Israeli diamond sector, which saw polished exports drop 22.3% in the first half of 2026.
- 07The initiative was led by Diamond Exchange President Nissim Zohar, with support from Finance Minister Bezalel Smotrich.
Under the new terms, participating diamond dealers will have their taxable income fixed at a low percentage of their turnover, allowing them to know their exact tax liability at the start of each year. The agreement also abolishes the minimum income floor, which previously forced merchants to report high earnings even during periods of limited activity.
This reform positions Israel favorably against its international competitors. Israel's new tax rate is more than three times lower than Belgium's rate of 2.1% of turnover, and gemstones and jewelry will enter Israel duty-free, compared to a 5% tariff in Dubai. Additionally, registering a foreign company in Israel will be streamlined for any foreign citizen, whereas the process in Dubai can take up to a year.
The agreement was spearheaded by Diamond Exchange President Nissim Zohar, referred to as Nissim Zuaretz by Globes, and fulfills a commitment made two years prior by Finance Minister Bezalel Smotrich. It comes amid a significant downturn for the local sector, with Globes reporting a 22.3% drop in polished diamond exports during the first half of 2026.
Summarized by baba from the reports of 3 newsrooms. Updated
Latest report: NEWSru Israel. Read NEWSru Israel’s originalThe coverage
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