Supreme Court Advises Hagag Group to Drop Regency Hotel Tax Appeal
The Supreme Court advised the Hagag Group to drop its appeal over 233 million NIS in tax losses tied to the Regency Hotel acquisition, potentially impacting a 50 million NIS tax saving.
The Supreme Court has advised the Hagag Group to reconsider its appeal regarding the acquisition of the Regency Hotel company and the utilization of 233 million NIS in accumulated losses. The real estate group sought to leverage these losses for a tax saving of 50 million NIS following the purchase of the former public shell.
Four years ago, Judge Avigdor Dorot of the Jerusalem District Court ruled that the acquisition constituted an artificial transaction aimed at improper tax reduction. Supreme Court Justices Ofer Grosskopf, Gila Kanfi-Steinitz, and Ruth Ronen presented their recommendation, requiring the Hagag Group to submit its response by Thursday, October 29, 2026.
The Regency Hotel Jerusalem previously owned the Hyatt Hotel on Mount Scopus, which it sold in 2010 to Dan Public Transportation for 45 million dollars. The company subsequently became a public shell sold for 8 million NIS, and a year later, the Hagag Group acquired it for 18.6 million NIS to offset tax liabilities. The Jerusalem tax assessor rejected the move, a stance upheld by the District Court, which noted that the primary motive was fiscal rather than commercial.
