Israel Extends Tax-Free Inspection Period

RAPAPORT... Israeli authorities have lengthened the amount of time dealers can spendinspecting polished diamonds without paying a 0.1% import duty. Diamond controller Danny Tal, Israel's regulator for theindustry, will now allow companies up to 30 days to examine stones tax-free beforedeciding whether to buy them, as long as the goods are worth $50,000 or more, theIsrael Diamond Exchange (IDE) reported this week. The change will help large companies with factories abroadbring more goods to Israel for sorting before they ship them, IDE presidentYoram Dvash wrote in a letter to members of the exchange earlier this month. Previously,many Israeli companies had goods shipped straight to their branches around theworld, rather than bringing them for inspection in their home country, he said. "The time pressureimposed by the inspection period and the tax on goods resulted in merchandisenot reaching Israel," he added. The system also prevented Israeli firms from properlyexamining diamonds before purchasing or returning them, the IDE explained. The new rule goes intoeffect on May 1, and will be in force until October 31, at which pointofficials will assess if the amendment has achieved its purpose, and whether toextend it. The change is only relevant to companies that ship polished into Israel, asthe country does not charge import duty on rough diamonds. The tax-free period isonly for inspection of goods, Dvash explained. Authorities will consider anyonewho changes a stone's character - such as its weight or value - to haveimported the item, and will therefore levy a charge. That includes cutting, polishing,repairing and cleaning, Dvash continued.Image: Three Photographers