The Rabinovitch committee on tax reform will shortly publish plans to turn Israel into a tax haven for international corporations that transfer operations here.

The timing is not coincidental, as the chairman of the treasury-appointed committee, Yair Rabinovitch, revealed yesterday.

At a Tel Aviv University tax conference, Rabinovitch said the Justice Ministry had asked him to hold off until the Financial Action Task Force took Israel off its blacklist of countries that condone money laundering - which it did last Friday.

The FATF, which operates under the auspices of the OECD, had closely watched Israel's treatment of money laundering. Although the Knesset enacted appropriate laws 18 months ago, the task force only delisted Israel once it was clear that the authorities were strictly enforcing the legislation.

The Rabinovitch panel had made only general proposals in its June 12 report, saying that special treatment should be given to companies controled by foreign residents, with the majority of their activities overseas, but managed from Israel.

The committee is expected to release details of its proposal within a few days and hopes to see the Knesset pass it into law in a few weeks.

The provisions are based on a Dutch version of special tax rates and would cut taxes on foreign corporations that transfer their headquarters to Israel. The lower tax rate would also be applied to company dividends that foreign shareholders withdrew from Israel.