NOTE
20 – INCOME TAX
| A. | The
Company is subject to the U.S. federal income tax rate of 21% plus state income tax rates
which vary from state to state. |
Income
of the Israeli company is taxable at enacted tax rate of 23%.
The
Company, Save Foods Ltd. and NTWO OFF Ltd. have not received final tax assessments since their inception although the tax reports of
the Company for the years through December 31, 2015 and of Save Foods Ltd for the years through December 31, 2017 are deemed to be final.
As
of December 31, 2024 and 2023, the Company and subsidiaries have estimated carry forward losses for tax purposes of approximately $31,202
and $24,689, respectively, of which $771 can be offset against taxable income generated until 2027 and $30,495 can be offset against
future taxable income, if any.
| B. | The
following is a reconciliation between the theoretical tax on pre-tax loss, at the income
tax rate applicable to the Company (federal tax rate) and the income tax expense reported
in the financial statements: |
SCHEDULE
OF INCOME TAX EXPENSES
| | |
2024 | | |
2023 | |
| | |
Year ended December 31 | |
| | |
2024 | | |
2023 | |
| | |
US Dollars | |
| | |
| | |
| |
| Pretax loss | |
| 5,602 | | |
| 7,260 | |
| Federal tax rate | |
| 21 | % | |
| 21 | % |
| Income tax computed at the federal income tax rate | |
| 1,176 | | |
| 1,525 | |
| Non-deductible expenses | |
| -(*) | | |
| (383 | ) |
| Share-based compensation | |
| (1 | ) | |
| (27 | ) |
| Differences in corporate income tax rates | |
| 26 | | |
| 68 | |
| Remeasurement of deferred taxes for foreign currency effects | |
| 20 | | |
| 99 | |
| Changes in valuation allowance | |
| (1,221 | ) | |
| (1,282 | ) |
| Income
tax expenses | |
| - | | |
| - | |
| (*) | Less than $1 thousand. |
N2OFF,
INC.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
(USD
in thousands, except share and per share data)
NOTE
20 – INCOME TAX (continued)
| C. | Deferred
taxes result primarily from temporary differences in the recognition of certain revenue and
expense items for financial and income tax reporting purposes and for carryforwards. Significant
components of the Company’s deferred assets and liabilities are as follows: |
SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES
| | |
2024 | | |
2023 | |
| | |
Year ended December 31 | |
| | |
2024 | | |
2023 | |
| Composition of deferred tax assets: | |
US Dollars | |
| | |
| | |
| |
| Employees and related institutions | |
| 2 | | |
| 4 | |
| Operating loss carry-forwards | |
| 6,883 | | |
| 5,493 | |
| Operating lease liabilities | |
| 2 | | |
| 11 | |
| Share-based compensation | |
| 182 | | |
| 182 | |
| Others | |
| 47 | | |
| 33 | |
| Total deferred tax assets | |
| 7,116 | | |
| 5,723 | |
| | |
| | | |
| | |
Composition
of deferred tax liabilities: | |
| | | |
| | |
| Right-of-use asset | |
| (2 | ) | |
| (13 | ) |
| Total deferred tax liabilities | |
| (2 | ) | |
| (13 | ) |
| | |
| | | |
| | |
| Net deferred tax assets | |
| 7,114 | | |
| 5,710 | |
| Valuation allowance | |
| (7,114 | ) | |
| (5,710 | ) |
The
net change during the year ended December 31, 2024 in the total valuation allowance amounted to $1,404
|