Annual and transition report of foreign private issuers pursuant to Section 13 or 15(d)

Taxes on Income

v3.22.1
Taxes on Income
 12 Months Ended
Dec. 31, 2020
Income Tax Disclosure [Abstract]  
TAXES ON INCOME
NOTE 10:- TAXES ON INCOME

 

  a. Corporate Tax rates:

 

The Israeli corporate tax rate applicable to the Company, Nano Size and Digiflex commencing 2018 and thereafter is 23%.

 

Non-Israeli subsidiaries are taxed according to the tax laws in their respective countries of residence.

 

  b. Net operating losses carryforwards:

 

As of December 31, 2020, the Company and its Israeli subsidiaries have accumulated losses for tax purposes in the amount of $42.3 million which may be carried forward and offset against taxable income for an indefinite period.

 

  c. Accounting for uncertainty in income taxes:

 

For the years ended December 31, 2020, 2019 and 2018, 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.

 

  d. Tax assessments:

 

Tax reports filed by the Company and its Israeli subsidiaries through the year ended December 31, 2014 are considered final.

 

  e. Deferred taxes on income:

 

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

 

    December 31,  
    2020     2019  
Deferred tax assets            
Operating loss carry forward   $ 9,730,590     $ 8,963,906  
Temporary differences     136,070       186,789  
      9,866,660       9,150,695  
Deferred tax liability                
Beneficial conversion feature     (99,790 )     (99,790 )
                 
Total deferred tax, net     9,766,870       9,050,905  
                 
Valuation allowance     (9,766,870 )     (9,050,905 )
                 
Net deferred tax assets   $
—
     $
—
  

 

The net change in the total valuation allowance for the year ended December 31, 2020 related primarily to an increase in deferred taxes calculated on the operating loss carry forward. 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 carry forwards are deductible.

 

  f. Reconciliation of the theoretical tax benefit and the actual tax expense:

 

    Year ended December 31,  
    2020     2019     2018  
                   
Loss before tax benefit   $ (12,543,737 )   $ (3,953,005 )   $ (1,972,558 )
                         
Statutory tax rate     23 %     23 %     23 %
                         
Income tax benefit     2,885,060       909,191       453,688  
Effect of:                        
Losses and timing differences for which valuation allowance was provided, net     (329,578 )     (478,812 )     (514,287 )
Non-deductible expenses and other permanent differences     (2,526,808 )     (332,799 )     146,315  
Beneficial conversion feature    
-
       (99,790 )     (94,858 )
Other     (28,674 )     2,210       9,142  
                         
Income tax expense recognized in profit or loss   $
—
     $
—
     $
—