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INCOME TAXES | 12 Months Ended
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Dec. 31, 2021
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES Tax rates applicable to the Company The taxable income of an Israeli company is subject to a corporate tax rate of 23% for 2021 and 2020.The Company’s subsidiaries are separately taxed under the domestic tax laws of the jurisdiction of incorporation of each entity. NOTE 11. INCOME TAXES (cont.) Loss before taxes is comprised as follows:
| December 31, 2021 |  | December 31, 2020
Domestic (Israel) | $ | (498,242) |  |  | $ | (67,713) |
Foreign | (5,807) |  |  | *)
Total | $ | (504,049) |  |  | $ | (67,713) |
*) Represents less than $1. Reconciliation of the theoretical tax expense (benefit) to the actual tax expense (benefit) The main reconciling item between the statutory tax rate of the Company and the effective tax rate are the non-recognition of tax benefits from accumulated net operating loss carryforward of the Company due to the uncertainty of the realization of such tax benefits and the unrecognized tax positions recorded in the period. Deferred income taxes 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. The Company’s deferred tax assets are comprised of operating loss carryforward and other temporary differences. The following table presents the significant components of the Company’s deferred tax assets:
| December 31, 2021 |  | December 31, 2020
Deferred tax assets: |  |  |
Operating loss carryforward | $ | 22,723 |  |  | $ | 7,660 |
Share based compensation | 98,396 |  |  | — |
Research and development | 5,586 |  |  | 1,532 |
Accrued social benefits and other | 366 |  |  | 217 |
Deferred tax asset before valuation allowance | $ | 127,071 |  |  | $ | 9,409 |
Valuation allowance | $ | (126,898) |  |  | (9,409) |
Total deferred tax assets | $ | 173 |  |  | $ | — |
Fixed Assets | (173) |  |  | — |
Deferred tax liabilities | $ | (173) |  |  | $ | — |
Net deferred taxes | $ | — |  |  | $ | — |
As of December 31, 2021 and 2020, the Company has provided a full valuation allowance in respect of deferred tax assets resulting from tax loss carry forwards in the Israeli parent and other temporary differences. Management currently believes that since the Company and its subsidiaries have a history of losses on a consolidated basis it is more likely than not that the deferred tax regarding the loss carry forward and other temporary differences will not be realized in the foreseeable future. NOTE 11. INCOME TAXES (cont.) Income taxes are comprised as follows:
| December 31, 2021 |  | December 31, 2020
Current | $ | 1,281 |  |  | $ | — |
Deferred | — |  |  | — |
| $ | 1,281 |  |  | $ | — |
| December 31, 2021 |  | December 31, 2020
Domestic | $ | — |  |  | $ | — |
Foreign | 1,281 |  |  | — |
| $ | 1,281 |  |  | $ | — |
Uncertain tax positions A reconciliation of the opening and closing amounts of total unrecognized tax benefits is as follows:
| December 31, 2021 |  | December 31, 2020
Opening balance | $ | — |  |  | $ | — |
Tax positions taken in current year | 856 |  |  | — |
Interest | — |  |  | — |
Ending Balance | $ | 856 |  |  | $ | — |
The Company recognizes interest and penalties, if any, related to unrecognized tax positions in income tax expense. Tax assessments The Company has subsidiaries around the world subject to tax in the jurisdictions in which they operate. The significant jurisdictions in which the Company’s subsidiaries are subject to tax are Israel, the U.S, and the U.K. Income tax returns are open for examination for the tax years 2017-2021 in Israel, 2018-2021 in the U.S., and 2021 in the U.K. As a global organization, the Company may be subject to a variety of transfer pricing challenges by taxing authorities in various jurisdictions. While management believes that adequate provision has been made in the Consolidated Financial Statements for any potential assessments that may result from tax examinations for all open tax years, the completion of tax examinations for open years may result in changes to the amounts recognized in the Consolidated Financial Statements. Net operating loss carryforward As of December 31, 2021, the Company and it’s subsidiaries had net operating carry forward losses for tax purposes which may be carried forward and offset against taxable income in the future for an indefinite period.
Name of Subsidiary | Net Operating Loss Carryforwards
REE Automotive Ltd | $ | (98,245) |
REE Automotive UK Limited | $ | (353) |
REE Automotive Holdings Inc. (1) | $ | (152) |
REE Automotive Japan K.K. | $ | (6) |
NOTE 11. INCOME TAXES (cont.) (1) Utilization of the 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.

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- 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 -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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