Incredimail 2011 Annual Report Download - page 115

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PERION NETWORK LTD. AND ITS SUBSIDIARIES
(Formerly: Incredimail Ltd.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 10:
-
INCOME TAXES
a.
Tax benefits under the Israel Law for the Encouragement of Capital Investments, 1959 (the "Law"):
Various industrial programs of the Company have been granted "Approved Enterprise" and "Beneficiary Enterprise" status, which provides
certain benefits, including tax exemptions and reduced tax rates. Income not eligible for Approved Enterprise and Beneficiary Enterprise
benefits is taxed at a regular rate.
In the event of distribution of dividends from the said tax-
exempt income, the amount distributed will be subject to corporate tax at the rate
ordinarily applicable to the Approved Enterprise's income. The tax-
exempt income attributable to the "Approved Enterprise" programs
mentioned above can be distributed to shareholders without subjecting the Company to taxes only upon the complete liquidation of the
Company. Tax-
exempt income generated under the Company's Beneficiary Enterprise program will be subject to taxes upon dividend
distribution or complete liquidation. The entitlement to the above benefits is conditional upon the Company's fulfilling the conditions stipulated
by the Law and regulations published thereunder. Should the Company fail to meet such requirements in the future, income attributable to its
Approved Enterprise and Beneficiary Enterprise programs could be subject to the statutory Israeli corporate tax rate and the Company could be
required to refund a portion of the tax benefits already received, with respect to such programs. As of December 31, 2011, management
believes that the Company is in compliance with all the conditions required by the Law.
F
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