NOTE 4 - INCOME TAX
A. Tax rates applicable to the income
The Company is subject to a blended US tax rate (Federal as well as State Corporate Tax) of 35% in 2016. The Company's subsidiary in Israel is subject to income tax at a regular corporate tax 25% in 2016.
In December 2016, a legislation to amend the corporate income tax law was published. The legislation determined a decrease of the corporate income tax law as of January 1, 2017 to 24% (1% decrease) and as of January 1, 2018 to 23% (additional 1% decrease).
As the entity is still in its development stage and 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
December 31, 2016
|
|
| |
|
|
|
|
Deferred tax assets:
|
|
|
|
|
Deferred taxes due to carryforward losses
|
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
|
Valuation allowance
|
|
|
(3,583
|
)
|
| |
|
|
|
|
|
Net deferred tax asset
|
|
|
-
|
|
B. Tax loss carry-forwards
Net operating loss carry-forwards as of December 31, 2016 are as follows:
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 and similar state provisions. The annual limitation may result in the expiration of net operating losses before utilization.