v3.25.1
Income Taxes
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes

Note 16 – Income Taxes

 

  A. Corporate income tax rate

 

  a) The income tax rates relevant to the Parent company in Nevada for the years 2024 and 2023 was 21%.
     
    The tax rates relevant to the Subsidiary for the years 2024 and 2023 was 23%.
     
    Current taxes for the reported periods are calculated according to the enacted tax rates presented above.
     
  b) Tax benefits under the Israeli Law for the Encouragement of Capital Investments, 1959 (the “Investments Law”).
     
    The Israeli Investments Law applies to Preferred Income derived or accrued in 2011 and thereafter by a Preferred Company.

 

 

IR-Med, Inc.

 

Notes to the Consolidated Financial Statements

 

Note 16 – Income Taxes (Cont’d)

 

The law provides a uniform and reduced income tax rate for all the Subsidiary’s income entitled to the benefits (“Preferred Income”). Starting from tax year 2017, the tax rate on Preferred Income for a company operating in the same area as the Subsidiary is 7.5%, subject to terms as defined within the Investments law.

 

  B. Deferred tax assets

 

The following is a summary of the significant components of deferred tax assets:

 

   December 31  December 31
   2024  2023
   US Dollars (In thousands)
Operating loss carryforwards   2,182    1,678 
Research and development costs capitalized for tax purposes   161    423 
Payroll and related payables   1    7 
Lease liability   —      9 
Total deferred tax assets   2,344    2,117 
           
Right of use asset- deferred tax liability   —      (19)
           
Total deferred tax assets, net   2,344    2,098 
Valuation allowance for deferred tax assets   (2,344)   (2,098)
           
Deferred tax assets, net of valuation allowance   —      —   

 

As of December 31, 2024, and 2023, the Company has provided full valuation allowance of US$ 2,344 thousand and US$ 2,098 thousand against its deferred tax assets given that it is not more likely than not that it will generate sufficient income for tax purposes to utilize the available deferred tax assets in the foreseeable future.

 

  C. Accounting for uncertainty in income taxes

 

  For the years ended December 31, 2024 and 2023, the Company did not have any significant unrecognized tax benefits. In addition, the Company does not expect that the amount of unrecognized tax benefits will change significantly within the next 12 months.
   
  The Company accounts for interest and penalties related to an underpayment of income taxes as a component of income tax expense. For the years ended December 31, 2024 and 2023, no interest and penalties related to income taxes have been accrued.

 

  D. Operating losses carry forwards and valuation allowance

 

  As of December 31, 2024, and 2023, the Company had operating loss carryforwards in the amount of US$ 10,235 thousand and US$ 7,668 thousand, respectively. The Company and its Subsidiary can reduce future taxable income with no limitation to the period of use.

 

 

IR-Med, Inc.

 

Notes to the Consolidated Financial Statements

 

Note 16 – Income Taxes (Cont’d)

 

  E. Composition of loss from continuing operations before income taxes:

 

  

For the year ended

December 31

 

For the year ended

December 31

   2024  2023
   US Dollars (In thousands)
Loss from continuing operations before income taxes:          
US   282    346 
Israel   1,617    4,563 
           
Loss from continuing operations before income taxes   1,899    4,909 

 

  F. Income tax assessment

 

  As of December 31, 2024, the Subsidiary has tax assessments that are considered as final in Israel due to lapse of statute of limitation period, through tax year 2019. The Parent Company has not been assessed for income tax purposes in the U.S. since its inception and is open to examination by the IRS from the tax year 2020.

 

 

IR-Med, Inc.

 

Notes to the Consolidated Financial Statements

 

Note 16 – Income Taxes (Cont’d)

 

  G. Reconciliation of the statutory income tax expense (benefit) to actual income tax expense

 

  Reconciliation between the theoretical income tax expense, assuming all income is taxed at the federal statutory income tax rate applicable to income of the Parent Company and the actual income tax expense as reported in the statements of operations is as follows:

 

 

   December 31  December 31
   For the years ended
   December 31  December 31
   2024  2023
   US Dollars (In thousands)
Loss before income taxes as reported in the statements of operations   (1,899)   (4,909)
           
Statutory tax rate   21%   21%
           
Theoretical income tax benefit on the above amount at the US federal statutory income tax rate   (399)   (1,031)

 

Additional tax (tax savings) in respect of:          
           
Nondeductible expenses   113    389 
Differences in tax rates between statutory tax and income tax of the Subsidiary*   (33)   (91)
Change in valuation allowance   246    644 
Effect of currency exchange differences   60    87 
Other   13    2 
           
Actual taxes on income   —      —   

 

  (*) The Subsidiary operates in Israel in a tax jurisdiction with a corporate income tax rate of 23%.

 

  H. Roll forward of valuation allowance

 

  

US Dollars

(In thousands)

Balance on January 1, 2023   1,454 
Change in valuation allowances - Income tax expense   644 
      
Balance on December 31, 2023   2,098 
Change in valuation allowances - Income tax expense   246 
      
Balance on December 31, 2024   2,344 

 

 

IR-Med, Inc.

 

Notes to the Consolidated Financial Statements