Company: TSEM
Filing Date: 2025-04-30
Form Type: 20-F
Source: 0001178913-25-001537
Chunk: 110

Company: TOWER SEMICONDUCTOR LTD
Filing Date: 2025-04-30
Form: 20-F
Item: Item 3
Chunk 110
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 year it was eligible
for Approved/Benefited/Preferred Enterprise status under the Investment Law, and the benefits available at that time.

Tax Benefits under the 2011 Amendment and thereafter

An amendment to the Investment Law that became effective on January
1, 2011, generally referred to as the 2011 Amendment, made significant changes to the Investment Law, which revamped the tax incentive
regime in Israel. The main changes are, inter alia, as follows:

  Industrial companies meeting the criteria set out by the Investment Law for a “ Preferred Income” of a “ Preferred                           
  Enterprise” (as defined below) will be eligible for reduced and flat corporate tax rates of 7.5% (currently, following the 2017              
  Amendment described below) or 16% in 2017 and thereafter, with the actual tax rates determined by the location of the enterprise in Israel.  
  The location of Tower's facilities in Israel (also referred to as “ Zone A”) entitles it to benefit from a tax rate of 7.5%                  
  on its Preferred Income. According to the 2011 Amendment, the tax incentives offered by the Investment Law are no longer dependent on        
  minimum qualified investments nor on foreign ownership.                                                                                      
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  A company can enjoy both government grants and tax benefits concurrently. Governmental grants will not necessarily be dependent on  

“ Preferred Income” is defined as income from a Preferred
Enterprise, as specified below, with the condition that the income was produced or arose in the course of the enterprise's ordinary activity
in Israel from one of the following (excluding certain income derives from intangible assets which are not attributed to the enterprise's
production): income from the sale of products of the Preferred Enterprise (including components that were produced by other enterprises)
and excluding certain products that are sourced from Israel’s natural resources); income from the sale of semiconductors produced
by other non-related enterprises which use the Preferred Enterprise’s self-developed know-how; income for providing a right to use
the Preferred Enterprise’s know how or software; royalties from the use of the know-how or software which was confirmed by the Head
of the Investment Center to be related to the production activity of the Preferred Enterprise; and services with respect to the aforementioned
sales. In addition, the definition of “ Preferred Income” also includes income from the provision of industrial R& D services