Company: TSEM
Filing Date: 2025-04-30
Form Type: 20-F
Source: 0001178913-25-001537
Chunk: 242

Company: TOWER SEMICONDUCTOR LTD
Filing Date: 2025-04-30
Form: 20-F
Item: Item 10
Chunk 242
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 rate described above with respect to its Preferred Income, and therefore, applies
a 7.5% tax rate in determining its Israeli current tax provision, deferred tax assets and liabilities. Any portion of Tower’s taxable
income that is not eligible for Preferred Enterprise benefits, if at all, is to be taxed at the Israeli statutory corporate tax rate of
23%.

Tax benefits under the 2017 Amendment

An amendment to the Investment Law was enacted as part of the Economic
Efficiency Law that was published on December 29, 2016, and became effective as of January 1, 2017, generally referred to as the 2017
Amendment. The 2017 Amendment provides new tax benefits for two types of “ Preferred Technology Enterprises,” as described
below, and is in addition to the other existing tax beneficial programs under the Investment Law.

The 2017 Amendment provides that a technology company satisfying
certain conditions will qualify as a “ Preferred Technology Enterprise” and will thereby enjoy a reduced corporate tax rate
of 12% on income that qualifies as “ Preferred Technology Income”, as defined in the Investment Law. The tax rate is further
reduced to 7.5% for a Preferred Technology Enterprise located in development Zone A. In addition, a Preferred Technology Enterprise will
enjoy a reduced corporate tax rate of 12% on capital gain derived from the sale of certain “ Benefitted Intangible Assets”
(as defined in the Investment Law) to a related foreign company if the Benefitted Intangible Assets were acquired from a foreign company
on or after January 1, 2017 for at least NIS 200 million, and the sale receives prior approval from the IIA.

The 2017 Amendment further provides that a technology company satisfying
certain conditions (group turnover of at least NIS 10 billion) will qualify as a “ Special Preferred Technology Enterprise”
and will thereby enjoy a reduced corporate tax rate of 6% on its “ Preferred Technology Income” regardless of the company’s
geographic location within Israel. In addition, a Special Preferred Technology Enterprise will enjoy a reduced corporate tax rate of 6%
on capital gain derived from the sale of certain “ Benefitted Intangible Assets” to a related foreign company if the Benefitted
Intangible Assets were either developed by the Special Preferred Technology Enterprise or acquired from a foreign company on or after
January 1, 2017, and the sale received prior approval from the IIA. A Special Preferred Technology Enterprise that acquires Benef