U.s., Israel Sign Income Tax Accord

A new Israeli-American income tax treaty was initialed here today at the Treasury Department during the fourth annual meeting of the U.S.-Israel Joint Committee for Investment and Trade. Treasury Secretary W. Michael Blumenthal and Israeli Finance Minister Simcha Ehrlich initialed the agreement which revises the 1975 agreement.

A joint statement issued by the two leaders said the new treaty takes into account tax law changes in both countries since 1975 and “to encourage mutually beneficial trade and investment.” The statement added: “The committee expects that the new treaty will play an important role in expanding economic relations between the two nations. The two countries will move as promptly as possible towards signature so that the treaty can soon be submitted to the appropriate authorities of the two nations for ratification.”

Ehrlich delivered to Blumenthal a special memorandum on economic assistance proposals that were understood to deal with U.S. aid related to Israel’s withdrawal from Sinai under its treaty with Egypt that is being negotiated. Israel reportedly is seeking a U.S. loan of more than $3 billion to help cover the costs of new airfields in the Negev and related projects, and the resettlement of Jewish settlers in Sinai.

The statement said the two governments also “intend to negotiate an agreement providing for the exchange of information and future collaboration in the energy field” and will establish a joint energy council to advise the government of Israel on energy matters.

The committee also reported that the Agriculture Research and Development Fund, agreed upon at its 1977 meeting in Jerusalem, has now been established and has already received numerous project proposals.