Israeli oil and gasoline exploration partnership NewMed Vitality (TASE: NWMD), the largest companion within the Leviathan pure gasoline reservoir, is being required to pay further tax of $198 million for the tax years 2019 and 2020, after the Israel Tax Authority discovered that the partnership’s taxable revenue was tons of of hundreds of thousands of {dollars} increased than it reported.
NewMed Vitality (previously Delek Drilling) is a restricted partnership that was based in 1993 below an settlement between Delek Drilling Administration (1993) Ltd as a common companion and Delek Drilling Trusts Ltd as a restricted companion, 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 up to now 5 years.
In its notification to the Tel Aviv Inventory Alternate, NewMed Vitality 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 good points 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 regarding the 2019 tax 12 months is over the interpretation of the way in which through which financing and different bills must be acknowledged. For 2020, the dispute is over that and over the timing of the popularity of expenditure on improvement 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 effectively. “The partnership has adopted an analogous interpretation regarding issues in dispute from the 2016 tax 12 months to now. These issues are at the moment being clarified in authorized proceedings between the Tax Authority and the partnership regarding the tax years 2016-2018,” it mentioned in its notification.
In accordance with the partnership, a choice on the matter won’t have a dramatic impact on its complete tax legal responsibility over time, however moderately on the timing of tax funds.
On the idea of an opinion from its skilled advisers, NewMed places the probabilities of its arguments being accepted at over 50%, and it subsequently 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.
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