Company: REE
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001628280-25-025661
Chunk: 202

Company: REE Automotive Ltd.
Filing Date: 2025-05-15
Form: 20-F
Item: Item 19
Chunk 202
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 to the actual tax expense (benefit)

The main reconciling items between the statutory tax rate of the Company and the effective tax rate are the non-recognition of tax benefits from accumulated net operating loss carryforward of the Company due to the uncertainty of the realization of such tax benefits and the reversal of uncertain tax positions accrual in the period.

Deferred income taxes

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Company’s deferred tax assets are comprised of operating loss carryforward and other temporary differences.

F-30

Table of Contents

REE AUTOMOTIVE LTD. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024

U. S. dollars in thousands (except share and per share data)

NOTE 12. INCOME TAXES(cont.)

The following table presents the significant components of the Company’s deferred tax assets and liabilities:

                                                     December 31, 2024                      December 31, 2023                  
 ───────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────
  Deferred tax assets:                                                                                                         
  Operating loss carryforward                        $                          73,665      $                          55,189  
  Share based compensation                                                      94,527                                 94,807  
  Research and development                                                      15,449                                 18,614  
  Accrued social benefits and other                  559                                    573                                
  Other costs                                        442                                    202                                
  Operating lease liability                                                      4,085                                  4,348  
  Deferred tax asset before valuation allowance      $                         188,727      $                         173,733  
  Valuation allowance                                                       ( 182,851)                             ( 164,848)  
  Total deferred tax assets                          $                           5,876      $                           8,885  
  Property and equipment, net                        ( 2,923)                               ( 3,166)                           
  Operating lease right-of-use asset                 ( 4,735)                               ( 5,108)                           
  Deferred tax liabilities                           $                        ( 7,658)      $                        ( 8,274)  
  Net deferred taxes                                 $                        ( 1,782)      $                             611  

Management currently believes that because the Company and its subsidiaries have a history of losses on a consolidated basis it is