Company: GAUZ
Filing Date: 2025-03-11
Form Type: 20-F
Source: 0001213900-25-022437
Chunk: 116

Company: Gauzy Ltd.
Filing Date: 2025-03-11
Form: 20-F
Item: Item 10
Chunk 116
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received prior approval from the IIA.

“ Special Preferred Technological
Enterprises” enjoy a reduced corporate tax rate of 6% on “ Preferred Technological Income” regardless of the company’s
geographic location within Israel. In addition, Special Preferred Technological Enterprises enjoy a reduced corporate tax rate of 6%
on capital gain derived from the sale of certain “ Benefited Intangible Assets” to a related foreign company if the Benefited
Intangible Assets were either developed by the Special Preferred Technological 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 Technological Enterprise that acquires
Benefited Intangible Assets from a foreign company for more than NIS 500 million should be eligible for these benefits for at least
10 years, subject to certain approvals as specified in the Investment Law.

Dividends distributed to individuals
or non-Israeli shareholders by a Preferred Technological Enterprise or a Special Preferred Technological Enterprise, paid out of
Preferred Technological Income, are generally subject to tax at the rate of 20% or such lower rate as may be provided in an applicable
tax treaty, which, in each case, will be withheld at source (non-Israeli shareholders are required to present, in advance of payment,
a valid certificate from the ITA allowing for such 20% rate or lower treaty rate). However, dividends distributed to an Israeli company
are not subject to tax (although, if such dividends are subsequently distributed to individuals or non-Israeli shareholders, withholding
tax at a rate of 20% or such lower rate as may be provided in an applicable tax treaty, would apply). If such dividends are distributed
to a foreign company that holds solely or together with other foreign companies 90% or more in the Israeli company and other conditions
are met, the tax rate will be 4% or such lower rate as may be provided in an applicable tax treaty (in either case, subject to the receipt
in advance of a valid certificate from the ITA allowing for such 4% rate or lower treaty tax rate).

We believe that we may be
eligible for the tax benefits under the 2017 Amendment as a Preferred Technological Enterprise, but there is no assurance that we will
meet all the terms and conditions required under the Investment Law that will allow us to enjoy any tax benefits under the Investment
Law.

Taxation of Non-Israeli Resident
Shareholders

Capital Gains Tax