Annual and transition report of foreign private issuers pursuant to Section 13 or 15(d)

Income Tax

v3.21.1
Income Tax
 12 Months Ended
Dec. 31, 2020
Income Tax Disclosure [Abstract]  
INCOME TAX

NOTE 10 - INCOME TAX


The Company and its subsidiary are taxed under Israel tax laws:


A. Tax rates

The corporate tax rates applicable for the years 2018-2020,is 23%.


B. Tax assessments

The Company and its subsidiary have tax assessments that are considered to be final through tax year 2015.


C. Losses for tax purposes carried forward to future years

As of December 31, 2020, CollPlant Biotechnologies Ltd. and CollPlant Ltd had approximately $6,165, and $51,096, respectively, of net carry forward tax losses which are available to reduce future taxable income with no limited period of use.


D. Deferred income taxes

    As of December 31,  
    2020     2019  
In respect of:            
Net operating loss carry forward   $ 13,170     $ 12,607  
Research and development expenses     820       801  
Valuation of financial instruments     (10 )     -  
Less – valuation allowance     (13,980 )     (13,408 )
Net deferred tax assets   $ -     $ -  

Realization of deferred tax assets is contingent upon sufficient future taxable income during the period that deductible temporary differences and carry forward losses are expected to be available to reduce taxable income. As the achievement of required future taxable income is not likely, the Company recorded a full valuation allowance.


E. Reconciliation of theoretical tax expenses to actual expenses

The primary difference between the statutory tax rate of the Company and the effective rate results virtually from the changes in valuation allowance in respect of carry forward tax losses and research and development expenses due to the uncertainty of the realization of such tax benefits.


F. Uncertain tax positions

As of December 31, 2020 and 2019, the Company does not have a provision for uncertain tax positions.


G. Roll forward of valuation allowance:

Balance at January 1, 2018   $ 11,155  
Additions     (232 )
Balance at December 31, 2018   $ 10,923  
Additions     2,485  
Balance at December 31, 2019   $ 13,408  
Additions     572  
Balance at December 31, 2020   $ 13,980