Company: TSEM
Filing Date: 2025-04-30
Form Type: 20-F
Source: 0001178913-25-001537
Chunk: 237

Company: TOWER SEMICONDUCTOR LTD
Filing Date: 2025-04-30
Form: 20-F
Item: Item 10
Chunk 237
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 securities.

68

ISRAELI TAXATION

The following is a summary of the material Israeli tax laws applicable
to us. This section also contains a discussion of material Israeli tax consequences concerning the ownership and disposition of our shares.
This summary does not discuss all the aspects of Israeli tax law that may be relevant to a particular investor in light of his or her
personal investment circumstances or to some types of investors subject to special treatment under Israeli law. Examples of this kind
of investor include residents of Israel or traders in securities who are subject to special tax regimes not covered in this discussion.
To the extent that this discussion is based on new tax legislation that has not yet been subject to judicial or administrative interpretation,
we cannot assure you that the appropriate tax authorities or the courts will accept the views expressed in this discussion. The discussion
below is subject to change, including due to amendments under Israeli law or changes to the applicable judicial or administrative interpretations
of Israeli law, which change could affect the tax consequences described below.

General Corporate Tax

Israeli companies are generally subject to statutory corporate
income tax currently at the rate of 23%. However, the effective tax rate payable by Tower that derives income from a “ Preferred
Enterprise” (as further discussed below) may be considerably less.

Israeli Tax on Capital Gains

An individual is subject to a tax at a rate of 25% on real capital
gains derived from the sale of shares, unless such individual claims a deduction for interest and linkage differences expenses in connection
with the purchase and holding of such shares and as long as the individual is not a “ Substantial Shareholder” in the company
issuing the shares. In the case of a “ Substantial Shareholder”, the tax rate is 30%.

According to the definition of the term under the Israeli Income
Tax Ordinance [New Version], 5721-1961 (the “ Ordinance”), a “ Substantial Shareholder” is generally a person who
alone, or together with his relative or another person who collaborates with him on a regular basis, holds, directly or indirectly, at
least 10% of any of the “means of control” of the corporation. “ Means of control” generally include: (1) the right
to vote, (2) the right to receive profits, (3) the right to nominate a director, an officer or any other similar positions in the corporation,
(4) the right to receive assets upon liquidation, or (5) the right to instruct