What is the difference between Preferred Enterprise and Preferred Technology Enterprise in Israel?

Preferred Enterprise (PE) applies to qualifying industrial companies generally, with a reduced corporate tax rate of 16% (or 7.5% in designated development zones). Preferred Technology Enterprise (PTE), introduced in 2017, applies specifically to companies whose income derives from qualifying intellectual property — patents, software copyright, or registered know-how developed through R&D in Israel. The PTE rate is 12% (or 7.5% in development zones), and it requires a formal application to the Investment Center with an R&D nexus analysis, whereas basic PE status is self-assessed on the annual tax return.