Intel has laid out its spending plans for Israel for the next five years, during which it will invest $550 million. For upgrading its Kiryat Gat plant, which will be involved in the manufacturing of new advanced chips for next-gen devices, the company has committed a total of $6 billion. The deal was announced on Sunday by Intel and the Economy Ministry’s Industrial Cooperation Authority, according to the Times of Israel.
Give and take deal
Intel has entered into an offset purchase arrangement with the state, and a $550 million is only a part of that. Intel will receive grants of up to $600 million from the state over the next five years and a major tax break through 2023. Over the five budget years, Intel will receive two grants of $300 million. For 2014, Israel had a standard company tax rate of 26.5%, but as part of the arrangement, Intel will be required to pay taxes at a discounted rate of 5% only through 2023.