Provision for Income Taxes

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

PROVISION FOR INCOME TAXES

NOTE 12 — PROVISION FOR INCOME TAXES

A. Basis of Taxation   United States:    On December 22, 2017, the U.S. Tax Cuts and Jobs Act, or the Act, was enacted, which significantly changed U.S. tax laws. The Act lowered the tax rate of the Company. The statutory federal income tax rate was 21% in 2018 and in 2019.   Israel:   The Company's Israeli subsidiaries and associated are governed by the tax laws of the state of Israel which had a general tax rate of 23% in 2019 and 23% in 2018. The Company is entitled to various tax benefits in Israel by virtue of being granted the status of an "Approved Enterprise Industrial Company" as defined by the tax regulations. The benefits include, among other things, a reduced tax rate.    In December 2016, the Israeli government published the Economic Efficiency Law (2016) (legislative amendments to accomplish budget goals for the years 2019 and 2018). According to such law, in 2017 the general tax rate was decreased by 1% and starting in 2018 was decreased by 2%; so that the tax rate was 23% in 2019 and was 23% in 2018 and onwards. In addition, the tax rate that applies to Preferred Enterprises in preferred areas was be decreased by 1.5% to 7.5% starting January 1, 2017.

B. Provision for Taxes

	Year ended December 31,
	2019			2018
Current:
Domestic	$	-		$	(7	)
Foreign (Israel)		(17	)		(62	)
		(17	)		(69	)
Taxes related to prior years		-			(15	)
Deferred:
Deferred taxes, net		-			(522	)
Total provision for income taxes	$	(17	)	$	(606	)

C. The reconciliation of income tax at the U.S. statutory rate to the Company's effective tax rate as follows:

	2019			2018
U.S. federal statutory rate		21	%		21	%
Tax rate difference between U.S. and Israel		2	%		2	)%
Effect of Israeli tax rate benefit		-	%		(7	)%
Effect of previous years		-	%		-	%
Change in valuation allowance		(16	)%		(9	)%
Others		(7	)%		(7	)%
Effective tax rate		0.0	%		0.0	%

D. Deferred Tax Assets and Liabilities

Deferred tax reflects the net tax effects of temporary differences between the carrying amounts of assets or liabilities for financial reporting purposes and the amounts used for income tax purposes. As of December 31, 2019 and 2018, the Company's deferred taxes were in respect of the following:

	December 31,
	2019			2018
Net operating loss carry forward	$	1,799		$	1,509
Provisions for employee rights and other temporary differences		20			278
Deferred tax assets before valuation allowance		1,819			1,787
Valuation allowance		(1,819	)		(1,787	)
Deferred tax assets		-			-
Deferred tax liability		-			-
Deferred tax assets, net	$	-		$	-

E. Tax losses   As of December 31, 2019, the Company's net operating loss carry forward amounted to approximately $8,567 based on the tax report of 2018 along with 2019 estimated tax results, which may be utilized to offset future taxable income for United States federal tax purposes. This net operating loss carry forward begins to expire in 2022.  Since it is more likely than not that the Company will not realize a benefit from this net operating loss carry forward, a 100% valuation allowance has been recorded to reduce the deferred tax asset to its net realizable value.

F. Tax Assessments   The Company received final tax assessments in the United States through tax year 2012, and with regard to the Israeli subsidiaries received final tax assessments up until tax year 2012.

G. Uncertain Tax Position   The Company did not record any liability for income taxes associated with unrecognized tax benefits during 2018 and 2019.