Company: PGYWW
Filing Date: 2025-12-05
Form Type: S-3ASR
Source: 0000950103-25-015781
Chunk: 67

Company: Pagaya Technologies Ltd.
Filing Date: 2025-12-05
Form: S-3ASR
Chunk 67
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less. Capital gains derived by an Israeli company are generally subject to taxation at the corporate tax rate.

Law for the Encouragement of Industry (Taxes), 5729-1969

The Law for the Encouragement of Industry (Taxes),
5729-1969, generally referred to as the “Industry Encouragement Law”, provides several tax benefits for “Industrial
Companies.” We believe that we currently qualify as an Industrial Company within the meaning of the Industry Encouragement Law.

The Industry Encouragement Law defines an “Industrial
Company” as an Israeli resident company that derives 90% or more of its income in any tax year, other than income from certain government
loans, from an “Industrial Enterprise” owned by it and located in Israel or in the “Area,” in accordance with
the definition under Section 3A of the ITO. An “Industrial Enterprise” is defined as an enterprise whose principal activity
in a given tax year is industrial production.

The following are the principal tax benefits available
to Industrial Companies:

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| · | under limited conditions, an election to file consolidated tax returns with controlled Israeli Industrial Companies; and |

| · | expenses related to a public offering are deductible in equal amounts over three years commencing with the year of the offering. |

Eligibility for benefits under the Industry Encouragement
Law is not contingent upon approval of any governmental authority.

Tax benefits and grants for research and development

Israeli tax law allows, under certain conditions,
a tax deduction for expenditures related to scientific research and development projects, including capital expenditures, in the year
in which they are incurred. Expenditures are deemed related to scientific research and development projects if:

| · | the expenditures are approved by the relevant Israeli government ministry, which depends on the field of research; |

| · | the research and development must be for the promotion of the company; and |

| · | the research and development is carried out by or on behalf of the company seeking such tax deduction. |

The amount of such deductible expenses is reduced
by the sum of any funds received through government grants to finance such scientific research and development projects. No deduction
under these research and development deduction rules is allowed if the deduction is related to an expense invested in an asset depreciable
under the general depreciation rules of the ITO. Expenditures that do not qualify under the conditions above are deductible in equal amounts
over three years.

From time to time,