Incredimail 2012 Annual Report Download - page 120

PERION NETWORK LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
The Investment Law, was subject to a reform effective January 2011. According to the reform a flat tax rate will apply to
companies eligible for the “Preferred Enterprise”
status. In order to be eligible for Preferred Enterprise status, a company
must meet minimum requirements establishing that it contributes to the country’
s economic growth and is a competitive
factor for the Gross Domestic Product (a competitive enterprise). Israeli companies which currently benefit from an
Approved or Beneficiary Enterprise status and meet the criteria for qualification as a Preferred Enterprise can elect to
apply the new Preferred Enterprise benefits by waiving their benefits under the Approved and Beneficiary Enterprise
status.
Commencing 2011, the Company elected to apply the new Preferred Enterprise benefits. Benefits granted to a Preferred
Enterprise include reduced and gradually decreasing tax rates. The tax rate is 15% in 2011 and 2012, 12.5% in 2013 and
2014 and 12% starting from 2015.
A distribution from a Preferred Enterprise out of the “Preferred Income”
would be subject to 15% withholding tax for
Israeli-resident individuals and non-
Israeli residents (subject to applicable treaty rates). A distribution from a Preferred
Enterprise out of the “Preferred Income” would be exempt from withholding tax for an Israeli-resident company.
Taxable income of Israeli companies is subject to the Israeli corporate tax at the following rates: 2010 - 25%, 2011 - 24%,
2012 – 25%.
Non-Israeli subsidiaries are taxed according to the tax laws in their respective countries of residence.
NOTE 10:
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INCOME TAXES (Cont.)
b.
Corporate tax rates in Israel:
c.
Income taxes of non
-
Israeli subsidiaries:
d.
Tax reports filed by the Company and its subsidiaries in Israel through the year ended December 31, 2008 are considered
final. The U.S tax returns of the U.S subsidiaries remain subject to examination by the U.S tax authorities for the tax years
beginning on December 31, 2008.
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