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INCOME TAX (Tables) | 12 Months Ended
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Dec. 31, 2017
Income Tax Disclosure [Abstract] |
Schedule of Components of Income Taxes |
Taxes on income included in the statements of income:
|  | US dollars |
|  | Year ended December 31, |
(in thousands) |  | 2017 |  |  | 2016 |  |  | 2015 |
Income taxes (tax benefit): |  |  |  |  |  |  |  |  |
Current taxes: |  |  |  |  |  |  |  |  |
In Israel |  |  | 6,251 |  |  |  | 5,581 |  |  |  | 6,279 |
Outside Israel |  |  | 10,308 |  |  |  | 10,303 |  |  |  | 6,089 |
|  |  | 16,559 |  |  |  | 15,884 |  |  |  | 12,368 |
Deferred taxes: |  |  |  |  |  |  |  |  |  |  |  |
In Israel |  |  | (1,982 | ) |  |  | 91 |  |  |  | (121 | )
Outside Israel |  |  | (169 | ) |  |  | (1,179 | ) |  |  | 206 |
|  |  | (2,151 | ) |  |  | (1,088 | ) |  |  | 85 |
Taxes in respect of prior years: |  |  |  |  |  |  |  |  |  |  |  |
In Israel (*) |  |  | 1,775 |  |  |  | 81 |  |  |  | 369 |
Outside Israel (**) |  |  | 1,522 |  |  |  | - |  |  |  | - |
|  |  | 3,297 |  |  |  | 81 |  |  |  | 369 |
|  |  | 17,705 |  |  |  | 14,877 |  |  |  | 12,822 |
(*) During November 2017, the Company has received from the Israeli tax authority ("ITA") tax assessments for the years 2013-2015 amounting to approximately NIS 11 million (approximately US$ 3 million). An amount of NIS 7.2 million (approximately US$ 2 million) due to the timing differences related to the deduction of certain expenses for tax purposes, which was agreed to be deducted in the coming years. The Company recorded an amount of NIS 6.2 million (approximately US$ 1.8 million) as tax expense related to prior periods and a deferred tax benefit in a similar amount. As part of the above tax assessment, the Company was required to pay the ITA an amount of NIS 1.8 million (approximately US$ 0.5 million) as interest expense. Such amount was recognized as part of financing income, net. (**)During November 2017, one of our subsidiaries in Brazil has received from the Brazilian tax authority ("RFB") a tax assessments for the years 2012-2014 amounting to BRL 10.3 million (approximately US$ 3.1 million), mainly due to an undetectable expenses. Accordingly, our subsidiary recorded an amount of BRL 4.8 million (approximately US$ 1.5 million) as tax expense related to prior periods. As part of the above tax assessment our subsidiary was required to pay an amount of BRL 3.6 million (approximately US$ 1.1 million) as penalty and BRL 1.7 (approximately US$ 0.5 million) as interest expense.
Schedule of Income Tax Reconciliation |
The following is reconciliation between the theoretical tax on pretax income, at the applicable Israeli tax rate, and the tax expense reported in the financial statements:
|  | US dollars |
|  | Year ended December 31, |
(in thousands) |  | 2017 |  |  | 2016 |  |  | 2015 |
Pretax income |  |  | 55,546 |  |  |  | 50,054 |  |  |  | 41,833 |
Statutory tax rate |  |  | 24 | % |  |  | 25 | % |  |  | 26.5 | %
Tax computed at the ordinary tax rate |  |  | 13,331 |  |  |  | 12,514 |  |  |  | 11,086 |
Nondeductible expenses (income) |  |  | (815 | ) |  |  | 766 |  |  |  | 526 |
Losses in respect of which no deferred taxes were generated (including changes in valuation allowance) |  |  | 243 |  |  |  | (151 | ) |  |  | 831 |
Deductible financial expenses recorded to other comprehensive income |  |  | (113 | ) |  |  | 90 |  |  |  | (439 | )
Tax adjustment in respect of different tax rates |  |  | 3,119 |  |  |  | 2,040 |  |  |  | 1,411 |
Taxes in respect of withholding at the source from royalties and dividends |  |  | 542 |  |  |  | 95 |  |  |  | 78 |
Adjustment in respect of tax rate deriving from “approved enterprises” |  |  | (436 | ) |  |  | (501 | ) |  |  | (405 | )
Others |  |  | 1,834 |  |  |  | 24 |  |  |  | (266 | )
|  |  | 17,705 |  |  |  | 14,877 |  |  |  | 12,822 |
Summary of Deferred Taxes | Composition:
|  | US dollars |
|  | Year ended December 31, |
(in thousands) |  | 2017 |  |  | 2016 |
Deferred taxes |  |  |  |  |  |
Provision for employee related obligations |  |  | 276 |  |  |  | 166 |
Provision for legal obligation and other |  |  | 6,262 |  |  |  | 3,868 |
Provision for employee related obligations |  |  | 849 |  |  |  | 771 |
Carry forward tax losses and foreign tax credit |  |  | 3,600 |  |  |  | 3,600 |
Temporary differences, net |  |  | 887 |  |  |  | 1,185 |
|  |  | 11,874 |  |  |  | 9,590 |
Valuation allowance |  |  | (3,476 | ) |  |  | (3,276 | )
|  |  | 8,398 |  |  |  | 6,314 |
Schedule of Income Before Income Taxes |
Income before income taxes is composed as follows:
|  | US dollars |
|  | Year ended December 31, |
(in thousands) |  | 2017 |  |  | 2016 |  |  | 2015 |
The Company and its Israeli subsidiaries |  |  | 22,138 |  |  |  | 22,634 |  |  |  | 23,987 |
Non-Israeli subsidiaries |  |  | 33,408 |  |  |  | 27,420 |  |  |  | 17,846 |
|  |  | 55,546 |  |  |  | 50,054 |  |  |  | 41,833 |
Changes in Unrecognized Tax Benefits | Reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
(in thousands) |  | US dollars |
Balance at January 1, 2015 |  |  | 421 |
Decrease related tax positions of prior years |  |  | (419 | )
Translations differences related to the current year |  |  | (2 | )
Balance at December 31, 2017, 2016 and 2015 |  |

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