NOTE 4 - INCOME TAX

Tax rates applicable to the income

U.S. corporate tax

The maximum statutory federal tax rate in the U.S. is 21%. The Company is not subject to current federal taxes, as it has incurred losses.

Israel corporate tax

The Company's subsidiary in Israel is subject to income tax at a regular corporate tax of 23%.

Deferred income taxes

As the Company has not yet generated revenues, it is more likely than not that sufficient taxable income will not be available for the tax losses to be utilized in the future. Therefore, a valuation allowance was recorded to reduce the deferred tax assets to its recoverable amounts.

	As of September 30, 2020			As of December 31, 2019

Deferred tax assets:
Deferred taxes due to carryforward losses		2,892			2,879

Valuation allowance		(2,892	)		(2,879	)

Net deferred tax asset		-			-

Tax loss carry-forwards

Net operating loss carry-forwards as of September 30, 2020 and December 31, 2019 are as follows:

	As of September 30, 2020		As of December 31, 2019
Israel		4,917		4,887
United States (*)		8,384		8,358

		13,301		13,245

Net operating losses in Israel may be carried forward indefinitely. Net operating losses in the U.S. are available through 2027.

(*) Utilization of U.S. net operating losses may be subject to substantial annual limitation due to the “change in ownership” provisions of the Internal Revenue Code of 1986, as amended, and similar state provisions. The annual limitation may result in the expiration of net operating losses before utilization.

Income tax benefit

On July 23, 2020, the company received a tax refund in the amount of $53 with respect to prior tax years. The income tax benefit has been recorded in the current period.