Company: TSEM
Filing Date: 2025-04-30
Form Type: 20-F
Source: 0001178913-25-001537
Chunk: 239

Company: TOWER SEMICONDUCTOR LTD
Filing Date: 2025-04-30
Form: 20-F
Item: Item 10
Chunk 239
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 year; and (iii) the capital gain from the sale was not generated through a permanent establishment of
the U. S. resident in Israel.

The purchaser of the shares, the stockbrokers who effected the
transaction or the financial institution holding the shares through which payment to the seller is made are obligated, subject to the
above-referenced exemptions if certain conditions are met, (including the receipt in advance of a valid tax certificate from the ITA allowing
for an exemption), to withhold tax on the amount of consideration paid upon the sale of the shares (or on the real capital gain on the
sale, if known) at the rate of 25% in respect of an individual and 23% in respect of a corporation.

Israeli Tax on Dividend Income

Israeli resident corporations are generally exempt from Israeli
corporate tax for dividends paid on our ordinary shares.

On distributions of dividends other than a pro-rata distribution
of bonus shares, or stock dividends, to Israeli and non-Israeli resident individuals and non-Israeli resident corporations, we would be
required to withhold income tax at the rate of 25% (or 30% if such shareholder is a “ Substantial Shareholder” at the time
receiving the dividend or on any date in the 12 months preceding such date and the shares are not held through a nominee company). If
the income out of which the dividend is being paid is attributable to a Benefited Enterprise or Preferred Enterprise or Preferred Technology
Enterprise under the Investment Law, the tax rate is generally not more than 20%. A different rate may be provided pursuant to an applicable
tax treaty (subject to the receipt in advance of a valid certificate from the ITA allowing for such a reduced tax rate or an exemption).

Under the US-Israel Tax Treaty, Israeli withholding tax on dividends
paid to a U. S. resident may not, in general, exceed 25%. Where the recipient is a U. S. resident corporation owning 10% or more of the
voting stock of the paying corporation during the part of the tax year which precedes the date of payment of the dividend and during the
entire tax year preceding such year, the Israeli tax withheld may not exceed 12.5% or 15% in the case of dividends paid out of the profits
of a corporation entitled to the benefits of the Investment Law, subject to certain conditions.

70

Law for the Encouragement of Capital
Investments, 5719-1959

The Law