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INCOME TAX (Tables) | 12 Months Ended
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Dec. 31, 2019
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) |  | 2019 |  |  | 2018 |  |  | 2017 |
Income taxes (tax benefit): |  |  |  |  |  |  |  |  |
Current taxes: |  |  |  |  |  |  |  |  |
In Israel |  |  | 6,155 |  |  |  | 6,622 |  |  |  | 6,251 |
Outside Israel |  |  | 7,674 |  |  |  | 8,325 |  |  |  | 10,308 |
|  |  | 13,829 |  |  |  | 14,947 |  |  |  | 16,559 |
Deferred taxes: |  |  |  |  |  |  |  |  |  |  |  |
In Israel |  |  | 299 |  |  |  | 781 |  |  |  | (1,982 | )
Outside Israel |  |  | (2,545 | ) |  |  | 1,565 |  |  |  | (169 | )
|  |  | (2,246 | ) |  |  | 2,346 |  |  |  | (2,151 | )
Taxes in respect of prior years: |  |  |  |  |  |  |  |  |  |  |  |
In Israel (*) |  |  | 439 |  |  |  | (20 | ) |  |  | 1,775 |
Outside Israel (**) |  |  | 212 |  |  |  | - |  |  |  | 1,522 |
|  |  | 651 |  |  |  | (20 | ) |  |  | 3,297 |
|  |  | 12,234 |  |  |  | 17,273 |  |  |  | 17,705 |
| (*) | During November 2017, the Company has received from the Israeli tax authority ("ITA") tax assessments for the years 2013-2015 amounting to NIS 11.3 million (approximately US$ 3.1 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. Accordingly, 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. In addition, 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 assessment for the years 2012-2014 amounting to BRL 10.3 million (approximately US$ 3.1 million), mainly due to an non-deductible expenses. Accordingly, our subsidiary recorded an amount of BRL 4.8 million (approximately US$ 1.5 million) as tax expense related to prior periods. In addition, 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. Such amount was recognized as part of financing income, net.
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) |  | 2019 |  |  | 2018 |  |  | 2017 |
Pretax income |  |  | 23,204 |  |  |  | 76,233 |  |  |  | 55,546 |
Statutory tax rate |  |  | 23 | % |  |  | 23 | % |  |  | 24 | %
Tax computed at the ordinary tax rate |  |  | 5,337 |  |  |  | 17,534 |  |  |  | 13,331 |
Nondeductible expenses (income) |  |  | 3,117 |  |  |  | (2,785 | ) |  |  | (815 | )
Losses in respect of which no deferred taxes were generated (including changes in valuation allowance) |  |  | - |  |  |  | (236 | ) |  |  | 243 |
Deductible financial expenses recorded to other comprehensive income |  |  | 297 |  |  |  | (177 | ) |  |  | (113 | )
Tax adjustment in respect of different tax rates |  |  | 3,045 |  |  |  | 2,384 |  |  |  | 3,119 |
Taxes in respect of withholding at the source from royalties and dividends |  |  | 725 |  |  |  | 31 |  |  |  | 542 |
Adjustment in respect of tax rate deriving from “approved enterprises” |  |  | (128 | ) |  |  | (100 | ) |  |  | (436 | )
Others |  |  | (159 | ) |  |  | 622 |  |  |  | 1,834 |
|  |  | 12,234 |  |  |  | 17,273 |  |  |  | 17,705
Summary of Deferred Taxes | Composition:
|  | US dollars |
|  | Year ended December 31, |
(in thousands) |  | 2019 |  |  | 2018 |
Deferred taxes |  |  |  |  |  |
Provision for vacation, recreation and bad debt |  |  | 350 |  |  |  | 258 |
Provision for legal obligation and other |  |  | 4,631 |  |  |  | 5,500 |
Provision for employee related obligations |  |  | 1,193 |  |  |  | 1,147 |
Carry forward tax losses and foreign tax credit |  |  | - |  |  |  | 3,600 |
Temporary differences, net |  |  | 1,344 |  |  |  | (1,360 | )
|  |  | 7,518 |  |  |  | 9,145 |
Valuation allowance |  |  | - |  |  |  | (3,476 | )
|  |  | 7,518 |  |  |  | 5,669 |
|  | US dollars |
|  | Year ended December 31, |
(in thousands) |  | 2019 |  |  | 2018 |
Deferred income taxes included in long-term investments and other assets |  |  | 10,385 |  |  |  | 12,127 |
Deferred income taxes included in long-term liabilities |  |  | (2,867 | ) |  |  | (6,458 | )
|  |  | 7,518 |  |  |  | 5,669
Schedule of Income Before Income Taxes |
Income before income taxes is composed as follows:
|  | US dollars |
|  | Year ended December 31, |
(in thousands) |  | 2019 |  |  | 2018 |  |  | 2017 |
The Company and its Israeli subsidiaries |  |  | 27,045 |  |  |  | 46,138 |  |  |  | 22,138 |
Non-Israeli subsidiaries |  |  | (3,841 | ) |  |  | 30,095 |  |  |  | 33,408 |
|  |  | 23,204 |  |  |  | 76,233 |  |  |  | 55,546

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