v3.24.0.1

INCOME TAXES | 12 Months Ended
--- | ---
Dec. 31, 2023
Income Tax Disclosure [Abstract] |
INCOME TAXES | NOTE 25: INCOME TAXES
a. | Tax rates in the U.S:
The Company is subject to U.S. federal tax at the rate of 21%. On December 22, 2017, the Tax Cuts and Jobs Act (the "Tax Act") was signed into law making significant changes to U.S. income tax law. These changes include, but are not limited to, a corporate tax rate decrease from 35% to 21% effective for tax years 2018 onwards and created new taxes on certain foreign-sourced earnings and certain related-party payments - the Global Intangible Low Taxed Income (“GILTI”). Furthermore, changes introduced by the Tax Act to Section 174 of the Internal Revenue Code, that came into effect on January 1, 2022, require taxpayers to amortize research and development expenditures over five years (if incurred in the U.S.) or fifteen years (if incurred outside the U.S.), thereby increasing taxable income and payable tax. The Tax Act required the Company to pay U.S. income taxes on accumulated foreign subsidiaries earnings not previously subject to U.S. income tax at a rate of 15.5% to the extent of foreign cash and certain other net current assets and 8% on the remaining earnings. The total tax liability was calculated to approximately $8,500, which will be paid over the eight-year period provided in the Tax Act (ending 2024).
b. | Corporate tax in Israel:
The taxable income of Israeli companies is subject to corporate tax at the rate of 23%. The Israeli subsidiary is also eligible for tax benefits as further described in note 25j.
c. | Carryforward tax losses:
As of December 31, 2023, the foreign subsidiaries have carryforward tax losses of $205,263 which do not have an expiration date.
d. | Deferred taxes:
Deferred taxes reflect the net tax effect of 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 liabilities and assets are as follows:
|  | December 31, |
|  | 2023 |  |  | 2022 |
Deferred tax assets, net: |  |  |  |  |  |
Research and Development carryforward expenses |  | $ | 25,527 |  |  | $ | 9,335 |
Carryforward tax losses(1) |  |  | 44,294 |  |  |  | 19,916 |
Stock based compensation expenses |  |  | 28,715 |  |  |  | 9,863 |
Deferred revenue |  |  | 13,244 |  |  |  | 8,954 |
Lease liabilities |  |  | 12,872 |  |  |  | 6,520 |
Inventory Impairment |  |  | 11,136 |  |  |  | 627 |
Foreign currency translation |  |  | 4,985 |  |  |  | 6,987 |
Allowance and other reserves |  |  | 17,367 |  |  |  | 23,255 |
Total Gross deferred tax assets, net |  | $ | 158,140 |  |  | $ | 85,457 |
Less, Valuation Allowance |  |  | (51,245 | ) |  |  | (23,777 | )
Total deferred tax assets, net |  | $ | 106,895 |  |  | $ | 61,680 |
Deferred tax liabilities, net: |  |  |  |  |  |  |  |
Intercompany transactions |  | $ | (4,470 | ) |  | $ | (6,292 | )
Right-of-use assets |  |  | (13,353 | ) |  |  | (6,618 | )
Purchase price allocation |  |  | (4,129 | ) |  |  | (4,617 | )
Property, plant and equipment |  |  | (5,481 | ) |  |  | - |
Total deferred tax liabilities, net |  | $ | (27,433 | ) |  | $ | (17,527 | )
Recorded as: |  |  |  |  |  |  |  |
Deferred tax assets, net |  | $ | 80,912 |  |  | $ | 44,153 |
Deferred tax liabilities, net |  |  | (1,450 | ) |  |  | - |
Net deferred tax assets |  | $ | 79,462 |  |  | $ | 44,153 |
(1) Related to deferred tax assets that would only be realizable upon the generation of net income in certain foreign jurisdictions. The Company’s Israeli subsidiary’s tax-exempt profit from Benefited Enterprises (as defined in note 25j) is permanently reinvested, Therefore, deferred taxes have not been provided for such tax-exempt income. The Company may incur additional tax liability in the event of intercompany dividend distributions by some of its subsidiaries. Such additional tax liability in respect of these subsidiaries has not been provided for in the Financial Statements as the Company’s management and the Board of Directors has determined that the Company intends to reinvest earnings of its subsidiaries indefinitely.
e. | Uncertain tax positions are comprised as follows:
|  | December 31, |
|  | 2023 |  |  | 2022 |  |  | 2021 |
Balance, at the beginning of the period |  | $ | 2,756 |  |  | $ | 2,192 |  |  | $ | 10,564 |
Increases related to current year tax positions |  |  | 1,502 |  |  |  | 564 |  |  |  | 635 |
Increase for tax positions related to prior years |  |  | 11,778 |  |  |  | - |  |  |  | - |
Decreases related to prior year tax positions |  |  | (128 | ) |  |  | - |  |  |  | (9,007 | )
Balance, at end of the period |  | $ | 15,908 |  |  | $ | 2,756 |  |  | $ | 2,192 |
The total amount of gross unrecognized tax benefits above would affect the Company's effective tax rate, if recognized. The Company accrues interest and penalties related to unrecognized tax benefits in its provision for income taxes. As of December 31, 2023, the Company accrued $2,927. The total amount of penalties and interest were not material as of December 31, 2022 and 2021. It is reasonably possible that the Company’s gross unrecognized tax benefits will decrease by an insignificant amount in the next 12 months, primarily due to the lapse of the statute of limitations.
f. | Income before income taxes are comprised as follows:
|  | Year ended December 31, |
|  | 2023 |  |  | 2022 |  |  | 2021 |
Domestic |  | $ | 49,758 |  |  | $ | 47,324 |  |  | $ | 13,659 |
Foreign |  |  | 31,341 |  |  |  | 129,831 |  |  |  | 173,565 |
Income before income taxes |  | $ | 81,099 |  |  | $ | 177,155 |  |  | $ | 187,224 |
g. | Income taxes (tax benefit) are comprised as follows:
|  | Year ended December 31, |
|  | 2023 |  |  | 2022 |  |  | 2021 |
Current taxes: |  |  |  |  |  |  |  |  |
Domestic |  | $ | 42,960 |  |  | $ | 56,958 |  |  | $ | (7,872 | )
Foreign |  |  | 46,531 |  |  |  | 37,473 |  |  |  | 37,564 |
Total current taxes |  |  | 89,491 |  |  |  | 94,431 |  |  |  | 29,692 |
Deferred taxes: |  |  |  |  |  |  |  |  |  |  |  |
Domestic |  |  | (2,244 | ) |  |  | (8,955 | ) |  |  | (3,682 | )
Foreign |  |  | (40,827 | ) |  |  | (2,100 | ) |  |  | (7,956 | )
Total deferred taxes |  |  | (43,071 | ) |  |  | (11,055 | ) |  |  | (11,638 | )
Income taxes, net |  | $ | 46,420 |  |  | $ | 83,376 |  |  | $ | 18,054 |
h. | Reconciliation of theoretical tax expense to actual tax expense:
The differences between the statutory tax rate of the Company and the effective tax rate are result of a variety of factors, including different effective tax rates applicable to non-US subsidiaries that have tax rates different than the Company tax rate, tax benefits relating to stock-based compensation and adjustments to valuation allowances on deferred tax assets of such subsidiaries. A reconciliation between the theoretical tax expense and the actual tax expense as reported in the consolidated statements of income is as follows:
|  | Year ended December 31, |
|  | 2023 |  |  | 2022 |  |  | 2021 |
Statutory tax rate |  |  | 21 | % |  |  | 21 | % |  |  | 21 | %
Effect of: |  |  |  |  |  |  |  |  |  |  |  |
Income tax at rate other than the U.S. statutory tax rate |  |  | (37.3 | )% |  |  | (10.8 | )% |  |  | (7.4 | )%
Losses and timing differences for which valuation allowance was provided |  |  | 27.7 | % |  |  | 5.2 | % |  |  | 2.7 | %
Prior year income taxes (benefit) |  |  | (1.0 | )% |  |  | 2.9 | % |  |  | (4.4 | )%
R&D Capitalization and other effects of TCJA |  |  | 42.5 | % |  |  | 18.9 | % |  |  | 0.1 | %
Non-deductible expenses |  |  | 4.5 | % |  |  | 13.2 | % |  |  | 2.0 | %
Other individually immaterial income tax items, net |  |  | (0.2 | )% |  |  | (3.3 | )% |  |  | (4.4 | )%
Effective tax rate |  |  | 57.2 | % |  |  | 47.1 | % |  |  | 9.6 | %
i. | Tax assessments:
The Israeli tax authorities issued a tax order for tax year 2016 and tax assessments for tax years 2017 and 2018 against the Company’s Israeli subsidiary, challenging the subsidiary's positions on several issues. The Israeli subsidiary has protested the order before the Central District Court in Israel and appealed the tax assessments. The Company believes it has adequately provided for these items, however adverse results could have a material impact on the Company’s financial statements. As of December 31, 2023, the Company and certain of its subsidiaries filed U.S. federal and various state and foreign income tax returns. The statute of limitations relating to the consolidated U.S. federal income tax return is closed for all tax years up to and including 2018. The statute of limitations related to tax returns of the Company’s Israeli subsidiary for all tax years up to and including 2015 has lapsed. The statute of limitations related to tax returns of the Company’s other subsidiaries has lapsed for part of the tax years, which differs between the different subsidiaries.
j. | Tax benefits for Israeli companies under the Law for the Encouragement of Capital Investments, 1959 (the “Investments Law”):
The Israeli subsidiary elected tax year 2012 as a "Year of Election" for “Benefited Enterprise” status under the Investments Law. According to the Investments Law, the Israeli subsidiary elected to participate in the alternative benefits program which provides certain benefits, including tax exemptions and reduced tax rates (which depend on, inter alia, the geographic location in Israel). Income not eligible for Benefited Enterprise benefits is taxed at a regular corporate tax rate. Upon meeting the requirements under the Investments Law, undistributed income derived from Benefited Enterprise from productive activity will be exempt from tax for two years from the year in which the Israeli subsidiary first has taxable income (“exempt period”), provided that 12 years have not passed from the beginning of the year of election. On October 24, 2018, the Company’s Israeli subsidiary received an approval from the Israeli Tax Authorities confirming the applicability of the two-year tax exemption as provided in the Investments Law until December 31, 2018. As of December 31, 2018, approximately $289,900 was derived from tax exempt profits earned by the Israeli subsidiary “Benefited Enterprises” in the two tax years exempt period, tax years 2017 - 2018. The Company has determined that such tax-exempt income will not be distributed as dividends and intends to reinvest the amount of its tax-exempt income earned by the Israeli subsidiary. Accordingly, no provision for deferred income taxes has been provided on income attributable to the Israeli subsidiary “Benefited Enterprises” as such income is essentially permanently reinvested. If the Israeli subsidiary’s retained tax-exempt income is distributed, the income would be taxed at the applicable corporate tax rate which depends on the foreign ownership in each tax year. Through December 31, 2023, the Israeli subsidiary had generated income under the provision of the Investments Law. Pursuant to amendment 73 to the Investments Law (the “2017 Amendment"), a preferred enterprise located in development area A will be subject to a tax rate of 7.5% instead of 9% effective from January 1, 2017 and thereafter (the tax rate applicable to preferred enterprises located in other areas remains at 16%). The 2017 Amendment also prescribes special tax tracks for preferred technological enterprises (“PTE”), which are subject to rules that were issued by the Ministry of Finance. On June 14, 2017, the Encouragement of Capital Investments Regulations (Preferred Technological Income and Capital Gain for Technological Enterprise), 2017 (the “Regulations”) were published. The Regulations describe, inter alia, the mechanism used to determine the calculation of the benefits under the PTE regime. According to these regulations, a company that complies with the terms under the PTE regime may be entitled to certain tax benefits with respect to income generated during the company’s regular course of business and derived from the preferred intangible asset, excluding income derived from intangible assets used for marketing and income attributed to production activity. A PTE, which is located in the center of Israel will be subject to tax at a rate of 12% on profits deriving from intellectual property, or 6% if its annual revenues exceed NIS 10 billion ("Threshold"). The Israeli subsidiary notified the ITA of its election to implement the PTE with effect from January 1, 2019, and its PTE income was subject to a 12% tax rate in the years 2019-2021, and in 2022-2023 to a 6% tax rate as the group surpassed the Threshold. The Company currently expects not to meet the Threshold in 2024 and consequently expects its tax on its PTE income to be 12% in 2024. The Company adjusted its deferred taxes accordingly. Tax Benefits for Research and Development: Israeli tax law (section 20A to the Israeli Tax Ordinance (New Version), 1961) allows a tax deduction for research and development expenses, including capital expenses, in the year in which they are paid. Such expenses must relate to scientific research in industry, agriculture, transportation or energy, and must be approved by the relevant Israeli government ministry, determined by the field of research. Expenses incurred in scientific research that are not approved by the relevant government ministry are amortized over a three-year period starting from the tax year in which they are paid. The Company’s Israeli subsidiary intends to submit a formal request to the relevant government ministry in order to obtain such approval for 2019 - 2021.
k. | Tax benefits under the Law for the Encouragement of Industry (Taxes), 1969:
The Company’s Israeli subsidiary claims currently to be qualified as ‘industrial company’ as defined by this law and as such, is entitled to certain tax benefits, consisting mainly of accelerated depreciation and amortization of patents and certain other intangible property.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org//1943274/2147480990/946-20-50-13 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//740/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-14 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-21 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482526/740-270-50-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-17 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482603/740-30-50-2 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration