A real estate entrepreneur who had exhausted all financing options for various projects needed additional financing for a very large project (see financing chapter).
As part of the deal’s financing structure, owing to the demand of the financers to remain tax wise as private people until the deal matured, a structure was formed that also allowed the project to be sold before its maturation. That solution allowed the financers to retain their status as private individuals, who were liable for just 15% tax after principal repayment, totaling tens of millions of shekels.
This structure ensured that if the project failed to sell at the maturation date, the financers could choose only at a later stage of the project, once it became clear that the project was profitable, between a capital transaction (capital gains tax) or dealer status (full taxation).