Company: TSEM
Filing Date: 2025-04-30
Form Type: 20-F
Source: 0001178913-25-001537
Chunk: 240

Company: TOWER SEMICONDUCTOR LTD
Filing Date: 2025-04-30
Form: 20-F
Item: Item 10
Chunk 240
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 for the Encouragement of Capital Investments, 5719-1959,
generally referred to as the Investment Law, was originally enacted in order to provide certain incentives for capital investments in
production facilities (or other eligible assets).

In recent years, the Investment Law has undergone major reforms
and several amendments which were intended to provide expanded tax benefits and to simplify the bureaucratic process relating to the approval
of investments qualifying under the Investment Law. The different benefits under the Investment Law depend on the enterprise’s geographic
location in Israel, the specific year in which the enterprise received approval from the Investment Center or the 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