BCT is subject to a tax rate of 25% in 2013 and 26.5% in 2014 and thereafter, in accordance with the Tax Burden Distribution Law of 2011 as well as subsequent legislation by the Israeli Knesset (Israeli parliament) in August 2013.

 

Such tax rate changes have no significant impact on the Company's financial statements.

 

The Company is subject to a blended US tax rate (Federal as well as State Corporate Tax) of 35% in 2013, 2014 and thereafter.

 

 

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred tax assets are as follows:

 

		December 31,
		2014			2013
		U.S. $ in thousands
Operating loss carryforward			29,222			25,156
Net deferred tax asset before valuation allowance			10,994			8,961
Valuation allowance			(10,994)			(8,961)
Net deferred tax asset			-			-

 

As of December 31, 2014, the Company has provided valuation allowances of $10,994 in respect of deferred tax assets resulting from tax loss carryforward and other temporary differences. Management currently believes that because the Company has a history of losses, it is more likely than not that the deferred tax regarding the loss carryforward and other temporary differences will not be realized in the foreseeable future.

  

 

As of December 31, 2014, the Company has an accumulated tax loss carryforward of approximately $29,222. Carryforward tax losses in Israel are of unlimited duration and carryforward tax losses in the U.S. can be carried forward and offset against taxable income in the future for a period of 20 years. Utilization of U.S. net operating losses may be subject to substantial annual limitations due to the "change in ownership" provisions of the Internal Revenue Code of 1986 and similar state provisions. The annual limitation may result in the expiration of net operating losses before utilization.

 

 

		Year ended December 31,
		2014			2013
		U.S. $ in thousands
United States			(3,789)			(1,205)
Israel			(5,457)			(3,694)
			(9,246)			(4,899)