–
Procter & Gamble’s annual turnover in Israel is NIS 1.1 billion, but sales are recorded as income by P&G’s Swiss unit for tax purposes.
/By Ilanit Hayut /
Will you offer us a hand? Every gift, regardless of size, fuels our future.
Your critical contribution enables us to maintain our independence from shareholders or wealthy owners, allowing us to keep up reporting without bias. It means we can continue to make Jewish Business News available to everyone.
You can support us for as little as $1 via PayPal at [email protected].
Thank you.
Sources inform ”Globes” that the annual turnover of Procter & Gamble (NYSE: PG) in Israel is NIS 1.1 billion, and its profit is at least NIS 100 million, but it pays no taxes. Even though P&G has an Israeli subsidiary with a general manager, Elena Kudryashova, the sales are recorded as income by P&G’s Swiss unit, based in Geneva, for tax purposes. As a result, P&G Israel has no income or profits. P&G posted a net profit of $11.3 billion on $83.7 billion revenue in 2012.
Given Israel’s companies tax rate of 26.5%, the treasury losses at least NIS 26.5 million in revenues on P&G Israel’s profit of NIS 100 million. P&G is one of Israel’s largest consumer products company.
The Israeli branch was established in 2001, and has 100 employees. Israeli sales have tripled since the branch was established. P&G markets its products to Israeli retailers through Diplomat Group Ltd. In contrast to other multinational consumer products companies operating in Israel, which sell directly to the local market, Diplomat buys P&G’s products from its Geneva branch.
The result is that P&G Israel has no income or profits, and therefore pays no taxes. Diplomat Group only pays taxes on its own profits. P&G said in response, “Procter & Gamble does not produce or distribute products in Israel. Procter & Gamble has a services company in Israel, which pays to the Israeli government all the taxes it is required to pay by law for the services provided in Israel. Procter & Gamble sells its products to independent distributors, which import and distribute its products in Israel, allowing consumers to enjoy its high-quality products. Procter & Gamble pays all the taxes levied on it by law in all countries worldwide.”
Published by www.globes-online.com
–
