Company: GAUZ
Filing Date: 2025-03-11
Form Type: 20-F
Source: 0001213900-25-022437
Chunk: 114

Company: Gauzy Ltd.
Filing Date: 2025-03-11
Form: 20-F
Item: Item 10
Chunk 114
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 these incentives, we have to comply
with the requirements of the Investment Law.

The Investment Law was significantly
amended effective as of April 1, 2005, as of January 1, 2011, or the 2011 Amendment, and as of January 1, 2017, or the
2017 Amendment. The 2011 Amendment introduced new benefits to replace those granted in accordance with the provisions of the Investment
Law in effect prior to the 2011 Amendment. The 2017 Amendment introduced new benefits for Technological Enterprises, alongside the existing
tax benefits.

The Preferred Enterprise Incentives Regime - the
2011 Amendment

The 2011 Amendment
introduced new benefits for income generated by a “ Preferred Company” through its “ Preferred Enterprise” (as
such terms are defined in the Investment Law). The definition of a Preferred Company includes a company incorporated in Israel that
is not wholly-owned by a governmental entity, and that, among other things, owns a Preferred Enterprise and is controlled and
managed from Israel. Pursuant to the 2011 Amendment, a Preferred Company is entitled to a reduced corporate tax rate of 16% with
respect to its Preferred Income derived by its Preferred Enterprise, unless the Preferred Enterprise is located in a specified
development zone, in which case the rate will be 7.5%. Income derived by a Preferred Company from a “ Special Preferred
Enterprise” (as such term is defined in the Investment Law) would be entitled, subject to certain conditions and during a
benefits period of 10 years, to further reduced tax rates of 8%, or 5% if the Special Preferred Enterprise is located in a
specified development zone. Dividends distributed from income which is attributed to a “ Preferred Enterprise” will be
subject to Israeli tax at the following rates: (i) Israeli resident corporations -0% (although, if such dividends are
subsequently distributed to individuals or a non-Israeli company, a tax rate of 20% or such lower rate as may be provided in an
applicable tax treaty will apply), (ii) Israeli resident individuals -20%, (iii) non-Israeli residents
(individuals and corporations) -20%, subject to a reduced tax rate as may be provided under the provisions of an applicable tax
treaty (in each case, subject to the receipt in advance of a valid certificate from the ITA allowing for such 20% rate or such lower
treaty