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TAXES ON INCOME
12 Months Ended
Dec. 31, 2018
Income Tax Disclosure [Abstract]  
Income Tax Disclosure [Text Block]
NOTE 8:-
TAXES ON INCOME
 
The Company and Ltd. are separately taxed under the domestic tax laws of the state of incorporation of each entity
 
a.
Tax Reform
 
On December 22, 2017, the U.S. Tax Cuts and Jobs Act of 2017 (the “TCJA”) was signed into law. The TCJA makes broad and complex changes to the Internal Revenue Code of 1986 (the “Code”) that impact the Company's provision for income taxes. The changes include, but are not limited to:
 
 ·Decreasing the corporate income tax rate from 35% to 21% effective for tax years beginning after December 31, 2017 (“Rate Reduction”);
 
 ·The Deemed Repatriation Transition Tax; and
 
 ·Taxation of Global Intangible Low-Taxed Income (“GILTI”) earned by foreign subsidiaries beginning after December 31, 2017. The GILTI tax imposes a tax on foreign income in excess of a deemed return on tangible assets of foreign corporations.

Accounting for the TCJA
In March 2018, the FASB issued ASU 2018-05, "Income Taxes Topic (740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118" ("ASU 2018-05"), to address the application of GAAP in situations when a registrant does not have the necessary information available, prepared or analyzed (including computations), in reasonable detail, to complete the accounting for certain income tax effects of the TCJA.
 
The Company completed the accounting treatment related to the tax effects of the TCJA. As a result:
 
 · The Company recognizes its accounting for changes in the U.S. federal rate and deferred tax impact for the rate change to be complete.
 
 ·The Company's analysis for the Deemed Repatriation Transition Tax has been filed with its December 31, 2017 tax return and the Company considered its accounting relating to the TCJA to be complete as of such date and did not make any measurement-period adjustments related to it.
 
 ·The Company accounted for the tax impact related to other areas of the TCJA and believes its analysis to be completed and consistent with the guidance in ASU 2018-05. In particular, the Company concluded that for 2018, it should not be subject to any tax on account of GILTI or base erosion and anti-abuse payments made by U.S. corporations to foreign related parties.
 
The Company recognizes that the Internal Revenue Service, the FASB and the Securities and Exchange Commission are continuing to publish and finalize ongoing guidance with respect to the TCJA which may modify accounting interpretation for the TCJA, the Company will account for these impacts in the period in which any changes are enacted.
 
b.
Tax rates applicable to Ltd.:
 
Corporate tax rate in Israel in 2017 was 24% and 2018 was 23%.
 
In December 2016, the Israeli Parliament approved the Economic Efficiency Law (Legislative Amendments for Applying the Economic Policy for the 2017 and 2018 Budget Years), 2016 which reduces the corporate income tax rate to 24% (instead of 25%) effective from January 1, 2017 and to 23% effective from January 1, 2018.
 
c.
Net operating loss carryforward:
 
Ltd. has accumulated net operating losses for Israeli income tax purposes as of December 31, 2018 in the amount of approximately $47,233. The net operating losses may be carried forward and offset against taxable income in the future for an indefinite period.
 
As of December 31, 2018, the Company had a U.S. federal net operating loss carryforward of approximately $7,120 that can be carried forward and offset against taxable income and that expires during the years 2031 to 2037. Utilization of U.S. loss carryforward may be subject to substantial annual limitation due to the “change in ownership” provisions of the Code and similar state provisions. The annual limitations may result in the expiration of losses before utilization.
 
The TCJA also modified the rules regarding utilization of net operating losses (“NOL”) and NOLs generated subsequent to the TCJA can only be used to offset 80% of taxable income with an indefinite carryforward period for unused carryforwards (i.e., they should not expire). During 2018, the Company generated an additional $1,965 of NOLs which are not subject to the annual limitation described above. Utilization of the federal and state net operating losses and credits may be subject to a substantial annual limitation due to an additional ownership change. The annual limitation may result in the expiration of net operating losses and credits before utilization and in the event we have a change of ownership, utilization of the carryforwards could be restricted.
 
d.
Deferred income taxes:
 
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial purposes and the amounts used for income tax purposes.
 
Significant components of the Company’s deferred tax assets are as follows:
 
 
 
December 31,
 
 
 
2018
 
 
2017
 
Deferred tax assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net operating loss carry forward
 
$
10,294
 
 
$
10,794
 
Temporary differences
 
 
791
 
 
 
620
 
 
 
 
 
 
 
 
 
 
Deferred tax assets before valuation allowance
 
 
11,085
 
 
 
11,414
 
Valuation allowance
 
 
(11,085
)
 
 
(11,414
)
 
 
 
 
 
 
 
 
 
Net deferred tax asset
 
$
-
 
 
$
-
 
 
The deferred tax balances included in the consolidated financial statements as of December 31, 2018 are calculated according to the tax rates that were in effect as of the reporting date and do take into account the potential effects of the reduction in the tax rate.
 
The net change in the total valuation allowance for the year ended
December 31, 2018
was a decrease of $
329
and is mainly relates to increase in deferred taxes on net operating loss for which a full valuation allowance was recorded. In assessing the
realizability
of deferred tax assets, management considers whether it is more likely than not that some or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets depends on the generation of future taxable income during the periods in which those temporary differences and tax loss
carryforward
are deductible. Management considers the projected taxable income and tax-planning strategies in making this assessment. In consideration of the Company’s accumulated losses and the uncertainty of its ability to utilize its deferred tax assets in the future, management currently believes that it is more likely than not that the Company will not realize its deferred tax assets and accordingly recorded a valuation allowance to fully offset all the deferred tax assets.
 
e.
Loss before taxes on income consists of the following:
 
 
 
Year ended
December 31,
 
 
 
2018
 
 
2017
 
 
 
 
 
 
 
 
Domestic
 
$
3,801
 
 
$
5,144
 
Foreign
 
 
14,002
 
 
 
10,599
 
 
 
 
 
 
 
 
 
 
 
 
$
17,803
 
 
$
15,743
 
 
f.
The main reconciling item between the statutory tax rate of the Company and the effective tax rate is the recognition of valuation allowance in respect of deferred taxes relating to accumulated net operating losses carried forward due to the uncertainty of the realization of such deferred taxes.