Tax Authority palms NewMed $198m tax invoice

Israeli oil and gasoline exploration partnership NewMed Power (TASE: NWMD), the largest accomplice within the Leviathan pure gasoline reservoir, is being required to pay extra tax of $198 million for the tax years 2019 and 2020, after the Israel Tax Authority discovered that the partnership’s taxable revenue was a whole lot of tens of millions of {dollars} increased than it reported.

NewMed Power (previously Delek Drilling) is a restricted partnership that was based in 1993 beneath an settlement between Delek Drilling Administration (1993) Ltd as a common accomplice and Delek Drilling Trusts Ltd as a restricted accomplice, for the needs of finishing up oil and gasoline exploration and manufacturing in Israel. The partnerships participation models are traded at NIS 18.45, giving it a market cap of NIS 21 billion, after a 530% rise prior to now 5 years.

In its notification to the Tel Aviv Inventory Change, NewMed Power said that on the final day of 2025 it had acquired tax assessments from the Israel Tax Authority for 2019 and 2020 “in opposition to a background of disputes that had arisen between the partnership and the Tax Authority and disagreements over the quantity of the partnership’s revenue for tax functions in 2019 and 2020.”

In its assessments, the Tax Authority decided that the revenue liable to tax from the partnership’s enterprise in 2019 was $406 million, as an alternative of the $170 million reported in its tax return, whereas its capital features have been $11 million, as declared.

The revenue liable to tax in 2020 was decided to be $370 million, as an alternative of the $87 million within the partnership’s tax return.

A query of interpretation

The primary dispute referring to the 2019 tax yr is over the interpretation of the way in which wherein financing and different bills must be acknowledged. For 2020, the dispute is over that and over the timing of the popularity of expenditure on growth of the Leviathan reservoir.

If the Tax Authority’s claims are accepted, the partnership should pay taxes (plus curiosity and index-linkage) on the expense of its unit holders amounting to $90 million for 2019 and $108 million for 2020.

The partnership said that it disagreed with the Tax Authority’s stance, and that discussions have been going down not nearly 2019-2020 however about earlier years as properly. “The partnership has adopted the same interpretation regarding issues in dispute from the 2016 tax yr to now. These issues are presently being clarified in authorized proceedings between the Tax Authority and the partnership in regards to the tax years 2016-2018,” it stated in its notification.

Based on the partnership, a call on the matter is not going to have a dramatic impact on its whole tax legal responsibility through the years, however quite on the timing of tax funds.

On the idea of an opinion from its skilled advisers, NewMed places the possibilities of its arguments being accepted at over 50%, and it due to this fact intends to file an objection to the tax assessments and to exhaust the executive and authorized proceedings obtainable to it.

Printed by Globes, Israel enterprise information – en.globes.co.il – on January 1, 2026.