Incredimail 2012 Annual Report Download - page 22

The tax benefits available to us require us to meet several conditions and may be terminated or reduced in the future, which would
increase our costs and taxes.
For the year ended December 31, 2012, our effective tax rate was 41%. We have benefited or currently benefit from a variety of
government programs and tax benefits that generally carry conditions that we must meet in order to be eligible to obtain any benefit. Our tax
expenses and the resulting effective tax rate reflected in our financial statements may increase over time as a result of changes in corporate
income tax rates, other changes in the tax laws of the countries in which we operate, non-
deductible expenses, loss and timing differences, or
changes in the mix of countries, where we generate profit.
If we fail to meet the conditions upon which certain favorable tax treatment is based, we would not be able to claim future tax benefits
and could be required to refund tax benefits already received. Additionally, some of these programs and the related tax benefits are available to
us for a limited number of years, and these benefits expire from time to time.
Any of the following could have a material effect on our overall effective tax rate:
Additional details are provided in “Item 5 – Operating and Financial Review and Products” under the caption “Taxes on income”,
in
“Item 10 – Additional Information” under the caption “Israeli taxation, foreign exchange regulation and investment programs”
and in note 10 to
our consolidated financial statements.
Risks Related to our Ordinary Shares
We do not intend to pay cash dividends.
Although we have paid cash dividends in the past, our current policy is to retain future earnings, if any, for funding growth. If we do not
pay dividends, you will generate a return on your investment only if our stock price appreciates between your date of purchase and your date of
sale of our shares.
See "Item 8.A Consolidated Statements and Other Financial Information —
Policy on Dividend Distribution" for additional information
regarding the payment of dividends.
We are subject to ongoing costs and risks associated with complying with extensive corporate governance and disclosure requirements.
As an Israeli public company, we incur significant legal, accounting and other expenses. We incur costs associated with our public
company reporting requirements as well as costs associated with corporate governance and public disclosure requirements, including
requirements under the Sarbanes-Oxley Act of 2002, the Dodd-
Frank Wall Street Reform and Consumer Protection Act of 2010, the Listing
Rules of the NASDAQ Stock Market, regulations of the U.S. Securities and Exchange Commission ("SEC"), the provisions of the Israeli
Securities Law that apply to dual listed companies (companies that are listed on the Tel Aviv Stock Exchange ("TASE") and another recognized
stock exchange located outside of Israel) and the provisions of the Israeli Companies Law 5759
-
1999 (the "Companies Law") that apply to us.
•
the judgment was given by a court competent under the laws of the state of the court and is otherwise enforceable in such state;
• the judgment was rendered by a court competent under the rules of private international law applicable in Israel;
•
the laws of the state in which the judgment was given provide for the enforcement of judgments of Israeli courts;
• adequate service of process has been effected and the defendant has had a reasonable opportunity to present his arguments and
evidence;
• the judgment and its enforcement are not contrary to the law, public policy, security or sovereignty of the State of Israel;
• the judgment was not obtained by fraud and does not conflict with any other valid judgment in the same matter between the
same parties; and
•
an action between the same parties in the same matter was not pending in any Israeli court at the time the lawsuit was instituted
in the U.S. court.
• some programs may be discontinued;
•
we may be unable to meet the requirements for continuing to qualify for some programs;
•
these programs and tax benefits may be unavailable at their current levels;
• upon expiration of a particular benefit, we may not be eligible to participate in a new program or qualify for a new tax benefit
that would offset the loss of the expiring tax benefit; or
• we may be required to refund previously recognized tax benefits if we are found to be in violation of the stipulated conditions.