Company: PGYWW
Filing Date: 2025-12-05
Form Type: S-3ASR
Source: 0000950103-25-015781
Chunk: 68

Company: Pagaya Technologies Ltd.
Filing Date: 2025-12-05
Form: S-3ASR
Chunk 68
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 we may apply to the IIA for
approval to allow a tax deduction for all or most of the research and development expenses during the year incurred. There can be no assurance
that such application will be accepted. If we are not able to deduct research and development expenses during the year of the payment,
we may be able to deduct research and development expenses in equal amounts over a period of three years commencing with the year of the
payment of such expenses.

Law for the Encouragement of Capital Investments, 5719-1959

The Law for the Encouragement of Capital Investments,
5719-1959, generally referred to as the “Investment Law”, provides certain incentives and tax benefits to eligible companies.
Generally, an investment program that is implemented in accordance with the provisions of the Investment Law, which may be classified
as an Approved Enterprise, a Beneficiary Enterprise, a Preferred Enterprise, a Special Preferred Enterprise, a Preferred Technological
Enterprise, or a Special Preferred Technological Enterprise, is entitled to benefits as discussed below. These benefits may include cash
grants from the Israeli government and tax benefits, based upon, among other things, the geographic location in Israel of the facility
of the company. In order to qualify for these incentives, Pagaya is required to comply with the requirements of the Investment Law.

The Investment Law was significantly amended effective
as of April 1, 2005, as of January 1, 2011 and as of January 1, 2017 (the “2017 Amendment”). The 2017 Amendment introduced
new benefits for Technological Enterprises, alongside the existing tax benefits.

New tax benefits under the 2017 Amendment that became effective on January 1, 2017

The 2017 Amendment provides new tax benefits for
two types of “Technological Enterprises,” as described below, which are in addition to the previously existing tax benefit
programs under the Investment Law.

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The 2017 Amendment provides that a Preferred Company
satisfying certain conditions will qualify as a “Preferred Technological Enterprise” and will thereby enjoy a reduced corporate
tax rate of 12% on income that qualifies as “Preferred Technological Income,” as defined in the Investment Law. The tax rate
is further reduced to 7.5% for a Preferred Technological Enterprise located in Development Zone A. In addition, a Preferred Technological
Enterprise will enjoy a reduced corporate tax rate of 12% on capital gains derived from