NOTE 9—INCOME TAX

Tax rates

The income of the Company and its subsidiary is taxable at the regular rate of corporate tax in Israel.

The rate of corporate tax in 2015 was 26.5%.

In January 2016, the Law for the Amendment of the Income Tax Ordinance (No. 216) was published, enacting a reduction of corporate tax rate beginning in 2016, from 26.5% to 25%.

In December 2016, the Economic Efficiency Law (Legislative Amendments for Achieving Budget Objectives in 2017 and 2018), 2016 was published. The Law stipulates a further reduction in the rate of corporate tax, from 25% to 23%. However, the Law establishes a temporary order by which the corporate tax rate in 2017 will be 24%. As a result, the corporate tax rate applicable in 2017 was 24% and the corporate tax rate that will apply from 2018 onwards will be 23%. The changes in the above tax rates has no effect on the Company’s financial statements.

Deferred tax assets for carry-forward tax losses are recognized if it is probable that the tax benefit will be realized through the existence of future taxable profits.

The carry-forward losses of CollPlant Holdings Ltd. (without capital losses) as at December 31, 2017 and 2016 amounted to approximately NIS 10 .9 million and NIS 9.9 million, respectively.

The carry-forward losses of CollPlant Ltd. (without capital losses) as at December 31, 2017 and 2016 amounted to approximately NIS 149 million and NIS 136.5 million, respectively.

Under Israeli tax laws, carryforward tax losses have no expiration date.

The Company did not recognize deferred taxes on the losses of the Company and the subsidiary, as it is not probable that the carry-forward losses will be realized in the foreseeable future.

In accordance with the Israeli Income Tax Ordinance, tax assessments filed by the Company and its subsidiary up to 2013 are considered final.

The Company and its subsidiary, are registered as authorized dealers in Israel for VAT purposes.