Company: GAUZ
Filing Date: 2025-03-11
Form Type: 20-F
Source: 0001213900-25-022437
Chunk: 112

Company: Gauzy Ltd.
Filing Date: 2025-03-11
Form: 20-F
Item: Item 10
Chunk 112
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 effect. The discussion below is not intended, and should not be construed,
as legal or professional tax advice and is not exhaustive of all possible tax considerations.

THEREFORE,
YOU ARE URGED TO CONSULT YOUR OWN TAX ADVISORS AS TO THE TAX CONSEQUENCES OF YOUR PARTICULAR SITUATION, AS WELL AS ANY TAX CONSEQUENCES
THAT MAY ARISE FROM THE PURCHASE, OWNERSHIP AND DISPOSITION OF OUR ORDINARY SHARES UNDER THE LAWS OF ANY STATE, LOCAL, FOREIGN OR OTHER
TAXING JURISDICTION.

Taxation of our Company

Corporate Tax

Israeli companies are generally
subject to corporate tax. The current corporate tax rate is 23%. However, the corporate tax rate applicable to a company that derives
income from an Approved Enterprise, a Preferred Enterprise, a Beneficiary Enterprise, a Preferred Technological Enterprise or a Special
Preferred Technological Enterprise (as discussed below) may be considerably lower. Real Capital Gains (as defined below) derived
by an Israeli resident company are generally subject to the prevailing corporate tax rate. Under the Israeli Income Tax Ordinance (New
Version), 5721-1961, or the Ordinance, a company will be considered as an “ Israeli resident” if: (a) it was incorporated
in Israel; or (b) the control and management of its business are operated from Israel.

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

The Law for the Encouragement
of Industry (Taxes), 5729-1969, or the Industry Encouragement Law, provides several tax benefits for “ Industrial Companies.”
The Industry Encouragement Law and the regulations promulgated thereunder provide that an “ Industrial Company” is an Israeli-resident company
incorporated in Israel, of which 90% or more of its income in any tax year, other than income from certain government loans, capital
gains, dividends and interest and linkage differentials, is derived from an “ Industrial Enterprise” owned by it and located
in Israel or in the “ Area,” as defined in the Ordinance. An “ Industrial Enterprise” is defined as an enterprise
whose principal activity in a given tax year is industrial production.

The following corporate tax
benefits, among others, are available to Industrial Companies:

  amortization                                                                                
  of the cost of purchased patents, rights to use a patent, and know-how, which are used for  
  the development