Tax case negotiations between the LWF and the State of Israel, concluded in December, 2008, led to an out-of-court settlement that was accepted by the Israeli High Court on January 1, 2009. The LWF was granted a tax exemption in 1966 by the Hashemite Kingdom of Jordan and in 1967 by the State of Israel in recognition of the humanitarian services offered by the LWF. The Israeli Tax Department sought to end this exemption in relation to a special employers tax in the late 1990s. In recent years, taxes claimed by the Israeli Tax Department put at great risk Augusta Victoria Hospital and all the LWF services offered to refugees and others living in poverty in the Palestinian Territories.
Based on the settlement, all back taxes up to 31 December 2008 were eliminated, thereby removing a strategic threat to the operation of Augusta Victoria Hospital and to the LWF as a whole and it was determined that the LWF would begin paying the employers tax as of January 1, 2009. In addition, apart from the court’s ruling, it was agreed that the LWF and the Israeli Ministry of Foreign Affairs would conduct annual meetings to ensure the longterm continuation of AVH and to discuss possible allocations.