NOTE
7 - TAXES ON INCOME
|
A. |
Deferred
income taxes reflect the net tax effects of net operating loss and temporary differences
between the carrying amounts of assets and liabilities for financial reporting purposes and
the amounts used for income tax purposes. Significant components of the Company’s deferred
tax assets are as follows: |
SCHEDULE OF DEFERRED TAX ASSETS
|
|
2022 |
|
|
2021 |
|
|
|
As
of September
30,
|
|
|
|
2022 |
|
|
2021 |
|
Composition
of deferred tax assets: |
|
Unaudited |
|
|
Unaudited |
|
Net operating loss carry-forward |
|
$ |
8,817 |
|
|
$ |
6,330 |
|
Research and development credits |
|
|
- |
|
|
|
1,879 |
|
Allowance for Bad Debt |
|
|
- |
|
|
|
90 |
|
Others |
|
|
- |
|
|
|
- |
|
Net deferred tax asset before deferred tax
liabilities and valuation allowance |
|
|
8,817 |
|
|
|
8,299 |
|
|
|
|
|
|
|
|
|
|
Composition of deferred
tax liabilities: |
|
|
|
|
|
|
|
|
Intangible assets upon acquisition of subsidiary |
|
|
(315 |
) |
|
|
(315 |
) |
Depreciation costs |
|
|
(120 |
) |
|
|
(128 |
) |
Net deferred tax asset before valuation
allowance |
|
|
8,383 |
|
|
|
7,856 |
|
|
|
|
|
|
|
|
|
|
Valuation allowance |
|
|
(8,067 |
) |
|
|
7,541 |
|
Net deferred tax
assets |
|
|
(315 |
) |
|
|
(315 |
) |
In
assessing the realization of deferred tax assets, management considers whether it is more likely than not that all or some portion of
the deferred tax assets will not be realized. The ultimate realization of the deferred tax assets is dependent upon the generation of
future taxable income during the periods in which temporary differences are deductible and net operating losses are utilized. Based on
consideration of these factors, the Company recorded a full valuation allowance as of September 30, 2022.
|
B. |
For
the period of nine months ended September 30, 2022, the following table reconciles the statutory
income tax rate to the effective income tax rate: |
SCHEDULE OF RECONCILE THE STATUTORY INCOME TAX RATE TO EFFECTIVE INCOME TAX RATE
|
|
2022 |
|
|
2021 |
|
|
|
Nine months
ended September 30, |
|
|
|
2022 |
|
|
2021 |
|
|
|
Unaudited |
|
|
Unaudited |
|
|
|
|
|
|
|
|
Tax rate |
|
|
23 |
% |
|
|
23 |
% |
|
|
|
|
|
|
|
|
|
Tax expense (benefit) at statutory rate |
|
$ |
(4,640 |
) |
|
$ |
(5,646 |
) |
Tax rate differential |
|
|
53 |
|
|
|
31 |
|
Permanent differences with respect to stock-based
compensation |
|
|
630 |
|
|
|
146 |
|
Permanent differences with respect to derivative
warrants liabilities, bifurcated conversion feature and convertible loans |
|
|
1,334 |
|
|
|
3,605 |
|
Loss carryforwards
and others |
|
|
2,623 |
|
|
|
1,864 |
|
Income tax expense
(benefit) |
|
$ |
- |
|
|
$ |
- |
|
TODOS
MEDICAL LTD.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
(U.S.
dollars in thousands)
|