Company: GAUZ
Filing Date: 2025-03-11
Form Type: 20-F
Source: 0001213900-25-022437
Chunk: 115

Company: Gauzy Ltd.
Filing Date: 2025-03-11
Form: 20-F
Item: Item 10
Chunk 115
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 tax rate).

The Technological Enterprise Incentives Regime - the
2017 Amendment

The 2017 Amendment provides
new tax benefits for two types of “ Technological Enterprises,” as described below, and is in addition to the other existing
tax beneficial programs under the Investment Law.

The 2017 Amendment applies
to “ Preferred Technological Enterprises” that meet certain conditions, including: (1) the research and development,
or R& D, expenses in the three years preceding the relevant tax year were at least 7% on average of the company’s annual
turnover or exceeded NIS 75 million in each such year, and (2) one of the following: (a) at least 20% of the workforce
(or at least 200 employees) are employees whose full salary has been paid and reported in the company’s financial statements as
R& D expenses; (b) a venture capital investment approximately equivalent to at least NIS 8 million was previously made in
the company and the company did not change its line of business; (c) growth in income by an average of 25% or more over the three years
preceding the relevant tax year, provided that the turnover was at least NIS 10 million in the relevant tax year and in each of
the preceding three years; or (d) growth in workforce by an average of 25% or more over the three years preceding the
relevant tax year, provided that the company employed at least 50 employees in the relevant tax year and in each of the preceding three years.
A “ Special Preferred Technological Enterprise” is an enterprise that meets conditions 1 and 2 above, and in addition belongs
to a “ Group” with annual consolidated revenues above NIS 10 billion.

Preferred Technological Enterprises
enjoy a reduced corporate tax rate of 12% on income that qualifies as “ Preferred Technological Income,” as defined in the
Investment Law. The tax rate is further reduced to 7.5% for a Preferred Technological Enterprise located in development zone “ A.”
In addition, a Preferred Technological Enterprise will enjoy a reduced corporate tax rate of 12% on capital gain derived from the sale
of certain “ Benefited Intangible Assets” (as defined in the Investment Law) to a related foreign company if the Benefited
Intangible Assets were acquired from a foreign company on or after January 1, 2017, for at least NIS 200 million, and the sale