There is no corporate income tax in the Cayman Islands. As part of the tax ruling obtained from the Israel Tax Authority with respect to the Group Restructuring (see Note 1a) the Company registered for tax purposes in Israel. The statutory corporate income tax rate for the years 2022, 2021 and 2020 in Israel was 23%.

The statutory Israeli corporate income tax rate applicable to the Israeli subsidiary, and based on the Company’s assessment that the Israeli subsidiary is eligible for the Preferred Technological Enterprise regime as per Israeli law was 7.5% for the years 2022, 2021 and 2020.

Preferred Technological Enterprise, as defined in the Law for the Encouragement of Capital Investments, 1959 (the “Encouragement Law”) in Israel, will be subject to tax at a rate of 7.5% on profits deriving from intellectual property which meets the conditions of being treated as “Preferred Technological Income”, and based on the Israeli subsidiary located in Preferred Area A.

Any dividends distributed to “foreign companies”, as defined in the Encouragement Law, deriving from income from the technological enterprise is subject to reduced Israeli withholding tax rate of 20% or lower rates under a relevant tax treaty, if applicable, or 0% if distributed to an Israeli corporation.

Other Group’s subsidiaries are separately taxed under the domestic tax laws and rates of the jurisdiction of incorporation of each entity.

Other than the Israeli subsidiary, none of the Group companies received final assessments since their incorporation.

As of December 31, 2022, the Group had carryforward operating tax losses and carryforward capital tax losses of $87,546 and $5, respectively. Deferred tax assets of approximately $573 relating to other deductible temporary differences (mainly employee benefits and share-based compensation), were recognized in the financial statements.

Deferred tax assets of approximately $6,871 and $1,503 relating to carryforward operating losses and other temporary differences (mainly research and development, employee benefits and share-based compensation), respectively, were not recognized because their utilization in the foreseeable future is not probable.


	Statements of financial				Statements of
	position				profit or loss
	December 31,				Year ended December 31,
	2022		2021		2022		2021		2020
Deferred tax assets:
Carryforward tax losses	$	—	$	41	$	(41)	$	(8)	$	(18)
Employee benefits and other liabilities		216		199		17		46		25
Share-based compensation		357		337		20		69		58
Deferred tax income (expenses)					$	(4)	$	107	$	65
Deferred tax assets	$	573	$	577


	Year ended
	December 31,
	2022		2021		2020
Current taxes	$	134	$	97	$	28
Deferred taxes, see also Note 23d above		4		(107)		(65)
Taxes in respect of previous years		31		14		296
	$	169	$	4	$	259

As Freightos-HK and the Israeli subsidiary incurred operating losses during the years ended December 31, 2022, 2021 and 2020 for which deferred income taxes were not recorded, as mentioned in Note 23c, the reconciliation between the tax expense, assuming that all the income and expenses, gains and losses in the statement of income were taxed at the statutory tax rate, and the taxes on income recorded in profit or loss, does not provide significant information and therefore is not presented.