Israel’s Tax Authority has launched enforcement proceedings and seized assets from Medtronic Ventor, the Israeli subsidiary of U.S. medical device giant Medtronic, over an alleged unpaid tax bill of 670 million shekels (about $180 million).
The debt stems from a June 2023 ruling by the Central District Court in Lod, which found that Ventor transferred intellectual property, including 180 patents, as part of its 2009 acquisition by Medtronic. The court determined the transfer was subject to tax, separate from the $325 million share purchase.
In a petition recently filed with Israel’s Supreme Court, Medtronic Ventor said its assets total less than 5% of the tax liability and asked the court to halt enforcement until the appeal process concludes. The company said that until recently, no liens had been imposed and no collection actions taken as both sides were in advanced talks over a potential settlement.
Ventor was founded in 2004 and developed a minimally invasive aortic valve that can be implanted through the chest wall without open-heart surgery. After the acquisition, it continued to operate in Israel for several years as Medtronic’s local research and development center before closing in April 2012.
Despite shutting down its R&D operations, the company continued to earn royalties from its intellectual property. Judge Shmuel Bornstein ruled last year that Ventor had transferred its assets to the parent company shortly after the acquisition without full compensation for the intellectual property, resulting in the tax liability.
Get the Ynetnews app on your smartphone: Google Play: https://bit.ly/4eJ37pE | Apple App Store: https://bit.ly/3ZL7iNv
The ruling set the base amount owed at 321 million shekels, with interest and adjustments raising the total to nearly 674 million shekels. Medtronic Ventor has appealed to the Supreme Court, citing a draft agreement in which the parent company would pay about 40% of the debt immediately and the rest over six years—amounting to an upfront payment of roughly a quarter-billion shekels.
The company said that just before Passover, negotiations collapsed after state prosecutors demanded a comprehensive settlement that Ventor declined. The Tax Authority subsequently began enforcement actions. The agency has not yet responded to the Supreme Court petition.