Company: GAUZ
Filing Date: 2025-03-11
Form Type: 20-F
Source: 0001213900-25-022437
Chunk: 117

Company: Gauzy Ltd.
Filing Date: 2025-03-11
Form: 20-F
Item: Item 10
Chunk 117
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Israeli capital gains tax
is imposed on the disposition of capital assets by a non-Israeli resident if those assets (i) are located in Israel, (ii) are
shares or a right to shares in an Israeli resident corporation, or (iii) represent, directly or indirectly, rights to assets located
in Israel, unless a specific exemption is available under Israeli domestic law or under an applicable tax treaty between Israel and the
seller’s country of residence. The Ordinance distinguishes between “ Real Capital Gain” and “ Inflationary Surplus.”
The Inflationary Surplus is a portion of the total capital gain equivalent to the increase of the relevant asset’s purchase price
attributable to an increase in the Israeli consumer price index, or, in certain circumstances, a foreign currency exchange rate, between
the date of purchase and the date of sale. Inflationary Surplus is currently not subject to tax in Israel. The Real Capital Gain is the
excess of the total capital gain over the Inflationary Surplus. Generally, Real Capital Gain accrued by individuals on the sale of our
ordinary shares will be taxed at the rate of 25%. However, if the shareholder is a “substantial shareholder” at the time
of sale or at any time during the preceding 12-month period, such gain will be taxed at the rate of 30%. A “substantial shareholder”
is generally a person who, alone or together with such person’s relatives or another person who collaborates with such person on
a permanent basis, holds, directly or indirectly, at least 10% of any of the “means of control” of the corporation. “ Means
of control” generally include the right to vote, receive profits, nominate a director or an executive officer, receive assets upon
liquidation, or the power to direct the actions of someone who holds any of the aforesaid rights, regardless of the source of such right.
Real Capital Gain derived by corporations generally is subject to tax at the prevailing corporate tax rate, which is currently 23%.

A non-Israeli resident
who derives capital gains from the sale of shares of an Israeli resident company that were purchased after the company was listed for
trading on a stock exchange outside of Israel will be exempt from Israeli capital gains tax if, among other conditions, the shares were
not held through or attributable to a permanent establishment that the non-resident maintains in Israel (and certain other conditions
are met). However, a non-Israeli “ Body of