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INCOME TAXES (Tables) | 12 Months Ended
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Dec. 31, 2017
Income Tax Disclosure [Abstract] |
Schedule of Income Tax Provision | The Company’s income tax provision is as follows:
|  | Year ended December 31, |
|  | 2017 |  |  | 2016 |  |  | 2015 |
Current tax expense (benefit): |  |  |  |  |  |  |  |  |
Local |  | $ | 3,622 |  |  | $ | -- |  |  | $ | -- |
Foreign (*) |  |  | 6,070 |  |  |  | 5,948 |  |  |  | (8,473 | )
Deferred tax expense (benefit): |  |  |  |  |  |  |  |  |  |  |  |
Local (see F below) |  |  | (82,370 | ) |  |  | -- |  |  |  | -- |
Foreign(*) (see E below) |  |  | (27,210 | ) |  |  | (4,516 | ) |  |  | (3,805 | )
Income tax expense (benefit) |  | $ | (99,888 | ) |  | $ | 1,432 |  |  | $ | (12,278 | )
Schedule of Profit (Loss) Before Taxes |
|  | Year ended December 31, |
|  | 2017 |  |  | 2016 |  |  | 2015 |
Profit (loss) before taxes: |  |  |  |  |  |  |  |  |
Domestic |  | $ | 198,008 |  |  | $ | 168,668 |  |  | $ | (59,797 | )
Foreign (*) |  |  | 3,760 |  |  |  | 41,930 |  |  |  | 18,392 |
Total profit (loss) before taxes |  | $ | 201,768 |  |  | $ | 210,598 |  |  | $ | (41,405 | )
(*) Foreign are provisions related to Tower’s Japanese and US subsidiaries.
Schedule of Deferred Tax Asset/Liability | The following is a summary of the components of the deferred tax assets and liabilities reflected in the balance sheets as of the respective dates (*)
|  | As of December 31, |
|  | 2017 |  |  | 2016 |
Net deferred tax asset - current: (**) |  |  |  |  |  |
Net operating loss carryforward |  | $ | - |  |  | $ | 797 |
Employees benefits and compensation |  |  | - |  |  |  | 3,895 |
Others |  |  | - |  |  |  | 5,480 |
|  |  | - |  |  |  | 10,172 |
Valuation allowance, see F below |  |  | - |  |  |  | (3,014 | )
Total net current deferred tax asset |  | $ | - |  |  | $ | 7,158 |
|  | As of December 31, |
|  | 2017 |  |  | 2016 |
Deferred tax asset and liability - long-term: (**) |  |  |  |  |  |
Deferred tax assets: |  |  |  |  |  |
Net operating loss carryforward |  | $ | 103,197 |  |  | $ | 306,496 |
Employees benefits and compensation |  |  | 4,895 |  |  |  | 2,405 |
Accruals and reserves |  |  | 2,415 |  |  |  | - |
Research and development |  |  | 1,707 |  |  |  | 1,940 |
Others |  |  | 6,129 |  |  |  | 3,403 |
|  |  | 118,343 |  |  |  | 314,244 |
Valuation allowance, see F below |  |  | (5,807 | ) |  |  | (279,898 | )
Deferred tax assets |  | $ | 112,536 |  |  | $ | 34,346 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Depreciation and amortization |  |  | (77,092 | ) |  |  | (96,242 | )
Gain on TPSCo acquisition |  |  | (15,957 | ) |  |  | (30,653 | )
Others |  |  | (559 | ) |  |  | (2,684 | )
Deferred tax liabilities |  | $ | (93,608 | ) |  | $ | (129,579 | )
Presented in long term deferred tax assets |  | $ | 82,852 |  |  | $ | -- |
Presented in long term deferred tax liabilities |  | $ | (63,924 | ) |  | $ | (95,233 | )
(*)deferred tax assets and liabilities relating to Tower for 2017 are computed based on the Israeli preferred enterprise tax rate of 7.5% and for 2016 are computed based on the effective Israeli statutory tax rate of 20%. (**) In 2017, the Company adopted ASU 2015-17 regarding classification of deferred taxes, prospectively, following which, effective 2017, deferred taxes are not presented as current assets.
Schedule of Reconciliation of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
|  | Unrecognized tax benefits |
Balance at January 1, 2017 |  | $ | 8,969 |
Additions for tax positions |  |  | 8,753 |
Reduction of prior years’ provision |  |  | (2,436 | )
Balance at December 31, 2017 |  | $ | 15,286 |
|  | Unrecognized tax benefits |
Balance at January 1, 2016 |  | $ | 13,538 |
Additions for tax positions of current year |  |  | 157 |
Expiration of prior years’ provision due to TJP closure |  |  | (6,472 | )
Additions for tax positions of prior years |  |  | 779 |
Translation differences |  |  | 967 |
Balance at December 31, 2016 |  | $ | 8,969 |
|  | Unrecognized tax benefits |
Balance at January 1, 2015 |  | $ | 24,961 |
Reduction in tax positions of current year |  |  | (623 | )
Reduction due to statute of limitation of prior years |  |  | (10,758 | )
Translation differences |  |  | (42 | )
Balance at December 31, 2015 |  | $ | 13,538 |
Schedule of Effective Income Tax Rate Reconciliation | The reconciliation of the statutory tax rate to the effective tax rate is as follows:
|  | Year ended December 31, |
|  | 2017 |  |  | 2016 |  |  | 2015 |
Tax expense (benefit) computed at statutory rates, see (*) below |  | $ | 48,433 |  |  | $ | 52,650 |  |  | $ | (10,972 | )
Effect of tax rate change on deferred tax liabilities, net(**) |  |  | (16,078 | ) |  |  | -- |  |  |  | -- |
Effect of different tax rates in different jurisdictions and Preferred Enterprise Benefit |  |  | (33,298 | ) |  |  | (4,772 | ) |  |  | 6,108 |
Gain on acquisition |  |  | -- |  |  |  | (10,450 | ) |  |  | -- |
Tax benefits for which deferred taxes were not recorded, see F below |  |  | (15,103 | ) |  |  | (23,489 | ) |  |  | 11,687 |
Change in Valuation allowance, see F below |  |  | (82,772 | ) |  |  | (6,212 | ) |  |  | (11,153 | )
Permanent differences and other, net |  |  | (1,070 | ) |  |  | (6,295 | ) |  |  | (7,948 | )
Income tax expense (benefit) |  | $ | (99,888 | ) |  | $ | 1,432 |  |  | $ | (12,278 | )
(*) The tax expense (benefit) was computed based on Tower’s regular corporate tax rate of 24% for 2017, 25% for 2016 and 26.5% for 2015 (**) Reduction in tax rates due to the U.S. Tax Reform and reduction in income tax rates in Japan.

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