Taxes on Income

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

TAXES ON INCOME

NOTE 12: TAXES ON INCOME

a. Tax rates applicable to the income of the Company:

1. Corporate tax rates

Taxable income of the Israeli parent is subject to the Israeli corporate tax at the rate of 23% in 2021 and 2020.

The Subsidiary is taxed according to the tax laws in its country of residence.

2. Income tax benefits

Income is subject to tax benefits under the Law for Encouragement of Capital Investments, 1959 (the “Investment Law”), which provides tax benefits for Israeli companies meeting certain requirements and criteria. The Investment Law has undergone certain amendments and reforms in recent decades.

The Israeli parliament enacted a reform to the Investment Law, effective January 2011. According to the reform, a flat rate tax applies to companies eligible for the “Preferred Enterprise” status. In order to be eligible for Preferred Enterprise status, a company must meet minimum requirements to establish that it contributes to the country’s economic growth and is a competitive factor for the gross domestic product.

The Company’s Israeli operations elected “Preferred Enterprise” status, starting in 2017.

Benefits granted to a Preferred Enterprise include reduced tax rates. As part of the Economic Efficiency Law (Legislative Amendments for Accomplishment of Budgetary Targets for Budget Years 2017-2018), 5777-2016, the tax rate for Area A will be 7.5% in 2017 onwards. In other regions, the tax rate is 16%. Preferred Enterprises in peripheral regions will be eligible for Investment Center grants, as well as the applicable reduced tax rates.

b. The Law for the Encouragement of Industry (Taxation), 1969:

The Company has the status of an “industrial company”, under this law. According to this status and by virtue of regulations published thereunder, the Company is entitled to claim a deduction of accelerated depreciation on equipment used in industrial activities, as determined in the regulations issued under the law. The Company is also entitled to amortize a patent or knowhow usage right that is used in the enterprise’s development or promotion, to deduct listed share issuance expenses and to file consolidated financial statements under certain conditions.

c. The components of the loss were as follows:

	Year ended December 31,
	2021		2020
Domestic	$	55,853	$	45,871
Foreign		33,940		15,702
	$	89,793	$	61,573

d. Net operating losses carryforward:

The Company has net operating losses and capital losses for tax purposes as of December 31, 2021 totaling approximately $236,875 and $507, respectively, which may be carried forward and offset against taxable income in the future for an indefinite period.

As of December 31, 2021, the Subsidiary has net operating losses carryforwards of $33,100 for federal tax purposes.

e. Final tax assessments:

The Company’s tax assessments through the 2016 tax year are considered final.

f. Deferred taxes:

The Company provided a full valuation allowance, to reduce deferred tax assets to their estimated realizable value, since it is more likely than not that all of the deferred tax assets will not be realized.