The decline in the US dollar exchange rate, together with technology companies’ ongoing need to reduce operating expenses, underscores the importance of reviewing their municipal tax classification. Many companies continue to pay municipal taxes (hereinafter: “Arnona”) under a classification that does not accurately reflect the nature of their operations, resulting in costs that may be higher than necessary. Dedicated classifications, such as “software house” or “knowledge-intensive industry,” may significantly reduce these costs—an opportunity relevant to companies operating in AI, cybersecurity, fintech, gaming, healthtech, medtech and biotech.
Why Are Technology Companies Paying More Arnona Than Necessary?
Against the backdrop of the decline in the US dollar exchange rate, and at a time when companies face an ongoing need to reduce operating expenses, many technology companies continue to pay Arnona under classifications that do not accurately reflect the nature of their operations, resulting in costs that may be higher than necessary.
Which Arnona Classifications May Reduce the Amount Payable?
In many cases, dedicated Arnona classifications are available, such as “software house” or “knowledge-intensive industry,” which may lead to a significant reduction in Arnona payments.
Which Companies May Benefit from Potential Savings?
The potential savings are relevant to a broad range of high-tech companies and start-ups across numerous sectors, including AI, cybersecurity, fintech, gaming, healthtech, medtech and biotech, as well as any field involving software research and development activities.
How Can We Assist?
We assist high-tech companies and start-ups in identifying potential savings, assessing their eligibility for reduced Arnona classifications and managing the process with the relevant local authority, with the aim of achieving an optimal outcome and providing the company with financial savings and greater long-term certainty regarding its Arnona payments.
To determine whether your company may also be paying more than necessary, you are welcome to send us your Arnona bill for review.
The above content is a summary provided for informational purposes only and does not constitute legal advice. It should not be relied upon without obtaining further professional legal counsel.
