cimatron ltd phần 9 doc

CIMATRON LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data)

F - 24

NOTE 12 – INCOME TAXES (Cont.)

On April 1, 2005, a significant amendment to the Law for Encouragement of Capital Investments, 1959 (the “Investment Law”) became effective. The

Investment Law provides that terms and benefits included in any certificate of approval that was granted before the amendment came into effect will remain

subject to the provisions of the Investment Law as they were on the date of such approval. Pursuant to the amendment, the Investment Center will continue to

grant Approved Enterprise status to qualifying investments. The amendment, however, limits the scope of enterprises that may be approved by the Investment

Center by setting criteria for the approval of a facility as an Approved Enterprise, such as provisions generally requiring that at least 25% of the Approved

Enterprise’s income will be derived from export.

In February 2007 the Company received a letter from the investment center stating that its approved enterprise from April 2001 is about to be terminated if the

Company does not submit a final performance report. The Company has decided not to pursue the completion of this investment plan, as it has not had any tax

benefits from it, and it intends to apply for tax benefits pursuant the amended law as described above, if and when relevant

B. Comprised as follows:

Year ended December 31,

2006 2 0 0 5 2 0 0 4

Income (loss) before taxes on income:

Domestic $ 372 $ (3,285) $ 807

Foreign 245 (1,337) (1,172)

$ 617 $ (4,622) (365)

Current taxes $ (27) $ (2) $ (12)

Tax in respect of prior years - - (11)

$ (27) $ (2) $ (23)