Israel Diamond Exchange and Tax Authority Sign Historic Tax Agreement

The Israel Diamond Exchange and the Tax Authority have signed a historic tax agreement for the diamond industry, effective for the years 2027-2028. The agreement marks a major trend reversal: after years in which diamond companies relocated their operations to Antwerp and Dubai, Israel is repositioning itself as a competitive trading center that is in many metrics even more attractive than its rivals.

The agreement is the result of an initiative led by the President of the Israel Diamond Exchange, Nissim Zuaretz, who placed the issue at the top of the exchange's agenda. Zuaretz worked closely over a long period with the Tax Authority and the Ministry of Finance until the signing, establishing a solid foundation for the future of the exchange. The agreement also fulfills the commitment of Minister of Finance Bezalel Smotrich, who declared about two years ago that he would work to strengthen the diamond industry.

Key Terms and International Competitiveness

Under the agreement, a diamond dealer who chooses to join the arrangement will know their tax liability at the start of the year, as taxable income will be predetermined as a fixed and low percentage of turnover. In addition, the minimum income floor, which previously forced dealers to report high income even when their activity was limited, has been canceled.

The agreement places Israel in a highly competitive position against the world's leading trading centers. In Belgium, the taxable income of diamond dealers stands at 2.1% of turnover—more than three times higher than in Israel. Alongside this, gemstones and jewelry enter Israel duty-free, compared to 5% in Dubai, and registering a foreign company in Israel is fast and open to any foreign citizen, whereas in Dubai the process can take over a year.

Leadership Remarks

"The signing of the agreement marks a historic turning point for the Israeli diamond industry. After years of declining competitiveness against international centers, we set a clear goal—to restore Israel's status as a leading global trading center—and today we are fulfilling it," said Nissim Zuaretz, President of the Israel Diamond Exchange.

Nissim Zuaretz also thanked Minister of Finance Bezalel Smotrich, Tax Authority Director Shay Aharonovitch, Chief of Staff Kareem Kanaan, and the professional teams for understanding the strategic importance of the sector.

Nadav Scheinberger, CEO of the Israel Diamond Exchange, added: "The agreement is the result of professional and in-depth staff work, during which we examined every parameter alongside models used in Belgium and Dubai. The result is a simple, transparent, and stable arrangement that grants the dealer full certainty in advance."