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INCOME TAXES (Tables) | 12 Months Ended
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Dec. 31, 2018
Income Tax Disclosure [Abstract] |
Schedule of Income Tax Provision | The Company’s income tax provision is as follows:
|  | Year ended December 31, |
|  | 2018 |  |  | 2017 |  |  | 2016 |
Current tax expense: |  |  |  |  |  |  |  |  |
Local |  | $ | 2,164 |  |  | $ | 3,622 |  |  | $ | -- |
Foreign (*) |  |  | 9,273 |  |  |  | 6,070 |  |  |  | 5,948 |
Deferred tax expense (benefit): |  |  |  |  |  |  |  |  |  |  |  |
Local (see F below) |  |  | 9,316 |  |  |  | (82,370 | ) |  |  | -- |
Foreign(*) (see E below) |  |  | (14,815 | ) |  |  | (27,210 | ) |  |  | (4,516 | )
Income tax expense (benefit) |  | $ | 5,938 |  |  | $ | (99,888 | ) |  | $ | 1,432 |
Schedule of Profit (Loss) Before Taxes |
|  | Year ended December 31, |
|  | 2018 |  |  | 2017 |  |  | 2016 |
Profit before taxes: |  |  |  |  |  |  |  |  |
Domestic |  | $ | 142,831 |  |  | $ | 198,008 |  |  | $ | 168,668 |
Foreign (*) |  |  | (3,514 | ) |  |  | 3,760 |  |  |  | 41,930 |
Total profit before taxes |  | $ | 139,317 |  |  | $ | 201,768 |  |  | $ | 210,598 |
(*) Foreign are amounts 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, |
|  | 2018 |  |  | 2017 |
Deferred tax asset and liability - long-term: (**) |  |  |  |  |  |
Deferred tax assets: |  |  |  |  |  |
Net operating loss carryforward |  | $ | 87,325 |  |  | $ | 96,443 |
Employees benefits and compensation |  |  | 4,914 |  |  |  | 4,891 |
Accruals and reserves |  |  | 4,738 |  |  |  | 3,546 |
Research and development |  |  | 12,292 |  |  |  | 10,528 |
Others |  |  | 3,615 |  |  |  | 2,935 |
|  |  | 112,884 |  |  |  | 118,343 |
Valuation allowance, see F below |  |  | (5,834 | ) |  |  | (5,807 | )
Deferred tax assets |  | $ | 107,050 |  |  | $ | 112,536 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Depreciation and amortization |  |  | (82,001 | ) |  |  | (77,092 | )
Gain on TPSCo acquisition |  |  | (1,240 | ) |  |  | (15,957 | )
Others |  |  | (750 | ) |  |  | (559 | )
Deferred tax liabilities |  | $ | (83,991 | ) |  | $ | (93,608 | )
Presented in long term deferred tax assets |  | $ | 73,460 |  |  | $ | 82,852 |
Presented in long term deferred tax liabilities |  | $ | (50,401 | ) |  | $ | (63,924 | )
(*) Deferred tax assets and liabilities relating to Tower for the years 2018 and 2017 are computed based on the Israeli preferred enterprise tax rate of 7.5%. (**) 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. (***) 2017 amounts are presented to conform to 2018 presentations.
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, 2018 |  | $ | 15,286 |
Additions for tax positions of current year |  |  | 716 |
Reduction due to statute of limitation of prior years |  |  | (1,219 | )
Balance at December 31, 2018 |  | $ | 14,783 |
|  | 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 |
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, |
|  | 2018 |  |  | 2017 |  |  | 2016 |
Tax expense computed at statutory rates, see (*) below |  | $ | 32,044 |  |  | $ | 48,433 |  |  | $ | 52,650 |
Effect of tax rate change on deferred tax liabilities, net(**) |  |  | (478 | ) |  |  | (16,078 | ) |  |  | -- |
Effect of different tax rates in different jurisdictions and Preferred Enterprise Benefit |  |  | (23,150 | ) |  |  | (33,298 | ) |  |  | (4,772 | )
Gain on acquisition |  |  | -- |  |  |  | -- |  |  |  | (10,450 | )
Tax benefits for which deferred taxes were not recorded, see F below |  |  | -- |  |  |  | (15,103 | ) |  |  | (23,489 | )
Change in Valuation allowance, see F below |  |  | (962 | ) |  |  | (82,772 | ) |  |  | (6,212 | )
Permanent differences and other, net |  |  | (1,516 | ) |  |  | (1,070 | ) |  |  | (6,295 | )
Income tax expense (benefit) |  | $ | 5,938 |  |  | $ | (99,888 | ) |  | $ | 1,432 |
(*) The tax expense (benefit) was computed based on Tower’s regular corporate tax rate of 23% for 2018, 24% for 2017 and 25% for 2016. (**) Reduction in tax rates due to the U.S. Tax Reform and reduction in income tax rates in Japan.

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