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INCOME TAX EXPENSE
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
INCOME TAX EXPENSE

NOTE 11: INCOME TAX EXPENSE

 

A. Tax rates applicable to the income of the Company:

 

Viewbix Inc. is taxed according to U.S. tax laws.

 

On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Act”), which among other provisions, reduced the U.S. corporate tax rate from 35% to 21%, effective January 1, 2018.

 

Viewbix Israel is taxed according to Israeli tax laws. The Israeli corporate tax rate is 23% in the years 2023 and 2022.

 

Gix Media and Cortex are recognized as a “Preferred-Technology Enterprise” in accordance with Section 51 of the Encouragement of Capital Investments Law, 1959 and are taxed at a reduced corporate tax rate of 12%.

 

B. Tax assessments:

 

As of December 31, 2023, Gix Media has a final tax assessment for all tax year up to the year ended December 31, 2020.

 

Cortex has a final tax assessment for all tax year up to the year ended December 31, 2017.

 

Viewbix Israel has a final tax assessment for all tax year up to the year ended December 31, 2017.

 

 

VIEWBIX INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

U.S. dollars in thousands (except share data)

 

NOTE 11: INCOME TAX EXPENSE (Cont.)

 

C. Deferred taxes are comprised of the following components:

 

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

 

Deferred taxes are comprised of the following components:

 

  

As of

December 31

  

As of

December 31

 
   2023   2022 
         
Deferred tax assets          
Deferred research and development expenses  $83   $279 
Employee compensation and benefits  $23   $13 
Operating loss carryforward  $7,927   $7,554 
Operating lease right of use asset  $47   $53 
Accrued severance pay  $-   $13 
           
Total deferred tax assets  $8,080   $7,912 
           
Deferred tax liabilities:          
Operating lease right of use liability  $48   $57 
Intangible assets associated with business combinations  $1,469   $1,796 
Total deferred tax liabilities  $1,517    1,853 
           
Net deferred tax assets before valuation allowance  $6,563   $6,059 
Valuation allowance   (7,933)   (7,572)
Net deferred tax liabilities  $1,370   $1,513 

 

As of December 31, 2023 and 2022, the Company has recorded a valuation allowance of $7,933 and $7,572 respectively, in respect of the deferred tax assets resulting primarily from tax loss carryforward of Viewbix Inc. and Viewbix Israel, as management currently believes these deferred tax assets will not be realized in the foreseeable future.

 

Income tax expenses are comprised as follows:

 

   2023   2022 
   Year ended December 31, 
   2023   2022 
         
Current tax expenses  $234   $782 
Tax benefit in respect of prior years  $(160)  $(84)
Deferred tax income  $(140)  $(545)
Taxes on income (benefit)  $(66)  $153 

 

 

VIEWBIX INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

U.S. dollars in thousands (except share data)

 

NOTE 11: INCOME TAX EXPENSE (Cont.)

 

D. Reconciliation of the theoretical tax expenses to the actual tax expenses:

 

A reconciliation between the theoretical tax expense, assuming all income is taxed at the statutory tax rate applicable to income of the Company, and the actual tax expense as reported in the statements of operations is as follows:

 

   2023   2022 
   Year ended December 31, 
   2023   2022 
         
Income (loss) before income taxes as reported in the consolidated statements of operations  $(8,753)  $1,270 
Statutory tax rate in the US   21%   21%
Theoretical tax expense (benefit)  $(1,838)  $267 
Increase (decrease) in tax expenses resulting from:          
Lower tax rates for preferred technology enterprises   637    (218)
Non-deductible expenses   734    192 
Tax benefits in respect of prior years   (160)   (84)
Losses for tax purposes for which deferred taxes were not recorded   101    (399)
Change in valuation allowance   361    342 
Others   99    53 
Taxes on income (benefit)  $(66)  $153 

 

E. Available carryforward tax losses:

 

As of December 31, 2023, Viewbix Israel incurred operating losses of approximately $13,332 which may be carried forward and offset against taxable income in the future for an indefinite period.

 

As of December 31, 2023, the Company generated net operating losses in the U.S. of approximately $20,895. Net operating losses in the U.S. are available through 2035. Utilization of U.S. net operating losses may be subject to substantial annual limitation due to the “change in ownership” provisions of the Internal Revenue Code of 1986 and similar state provisions. The annual limitation may result in the expiration of net operating losses before utilization.

 

F. Income (loss) before taxes includes the following components:

 

   2023     2022 
   Year ended December 31, 
   2023     2022 
USA  $(1,689)    $(595)
Israel  $(7,064)

(*)

   $1,865 
Total income (loss) before taxes on income  $(8,753)    $1,270 

 

(*) Including a goodwill impairment loss of $5,107 (see note 6.B).

 

 

VIEWBIX INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

U.S. dollars in thousands (except share data)