Trapped Profits Reform
Recurring legislation offering companies a temporary reduced tax rate to release trapped profits — trading immediate Treasury revenue for the long-term deferral, run as time-limited election windows.
Trapped Profits Reform refers to recurring Israeli legislation that offers companies a temporary, reduced tax rate to release accumulated trapped profits into distributable cash. The trade is straightforward: the Treasury collects immediate revenue it would otherwise wait years or decades for, and companies free up balance-sheet cash at a discount to the full deferred rate.
Israel has run several such windows, most prominently the 2012–2013 reform and subsequent iterations, each structured as a limited-time election. The reforms are politically recurrent because the underlying incentive structure keeps regenerating the trapped balances they are designed to unlock.