Taxable income is subject to the Israeli corporate tax at the rate as follows: 2017 – 24%, 2016 - 25% and 2015 - 26.5%.

In December 2016, the Israeli Parliament approved the Economic Efficiency Law (Legislative Amendments for Applying the Economic Policy for the 2018 and 2017 Budget Years), which reduces the corporate income tax rate to 24% effective from January 1, 2017 and to 23% effective from January 1, 2018.

Israeli companies are generally subject to Capital Gains Tax at the corporate tax rate.

As of December 31, 2017, the Company and its Israeli subsidiaries has accumulated losses for tax purposes in the amount of $33 million which may be carried forward and offset against taxable income for an indefinite period.

For the years ended December 31, 2017, 2016 and 2015, the Company did not have any unrecognized tax benefits and no interest and penalties related to unrecognized tax benefits had been accrued. The Company does not expect that the amount of unrecognized tax benefits will change significantly within the next 12 months.

Tax reports filed by the Company and its Israeli subsidiaries through the year ended December 31, 2011 are considered final.

Significant components of the Company’s deferred tax assets are as follows:

The net change in the total valuation allowance for the year ended December 31, 2017 primarily relates to the operating loss derived from Digiflex for which a full valuation allowance was recorded. The change in corporate income tax rate decreased valuation allowance (Refer to note 10a). In assessing the likelihood that deferred tax assets will be realized, 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 carryforwards are deductible.