On the Payment Date the Company will withhold tax at a rate of 25% or at a rate of 20% (for dividend distribution from "Preferred Income" or "Technological Preferred Income") of the Dividend amount and will remit the tax amount to the Agent, to be handled by the Agent in accordance with the terms and conditions of the Ruling.

Accordingly, the remaining of 75% or  80% of the Dividend amount will be remitted by the Company to its transfer agent, Equiniti Trust Company, LLC, which will transfer the said amount to the Shareholders (including through brokers who hold in brokerage accounts Ituran shares on behalf of Shareholders).

A Shareholder who is a resident of a country with which Israel has a tax treaty ("Treaty State") (based on a declaration to be provided by such Shareholder) and is the beneficial owner of the Dividend, may apply to the Agent requesting a Reduced Withholding Tax Rate. Such application must be received by the Agent between the Payment Date and May 9th, 2026 (the "Change of Rate Period"). The eligibility for a reduced tax rate will be evaluated by the Agent in accordance with Israeli tax laws, the Ruling and any applicable treaties, and therefore there is no guarantee that the applicant shareholder will be eligible for a reduction in the tax withholding amount.

A Shareholder who declared that he or she is a resident of a Treaty State and is the beneficial owner of the Dividend may apply to the Agent during the Change of Rate Period only (subject to complying with all the documentation requirements detailed below) requesting the receipt of the monetary difference between the tax amount remitted to the Agent (at a rate of 25% or 20%, respectively) and the amount represented by the withholding tax rate set forth in the tax treaty between Israel and such Treaty State or by the limited withholding tax rate applicable to such dividend payment under the ITO, to the extent applicable.

In addition to the foregoing, the Shareholder will provide a written declaration in the link in the form annexed to this announcement which will include declarations, among others,  as to the following: (i)  the Shareholder's tax residence for the tax year 2025, (ii) the shareholder is not an Israeli tax resident, as defined in Section 1 to the ITO, in the year of the declaration of the dividend, in the year of distribution of the dividend and in the year previous to the year of announcement a dividend payment. (iii) the Shareholder's beneficial ownership of the dividend and the return on investment in Ituran shears, (iv) the investment in Ituran shares has not been made through a permanent establishment in Israel, (v) the holding of Ituran shares is made for the Shareholder's own account and not for the account of others, and (vi) the payment will not be made to a permanent establishment of the Shareholder outside of the Shareholder's tax residence. (vii) the shareholder is eligible to enjoy the benefits under the tax treaty between the shareholder tax resident state and Israel and the shareholder is eligible to the reduce withholding tax rate under the tax treaty. (viii) the shareholder is not a transparent entity for tax purposes and if a transparent entity for tax purposes, then all the holders of the rights in such entity are not Israeli tax residents as defined in Section 1 to the ITO. (ix) the shareholder would include all the required documents as detailed in the link.

A non-Israeli corporate Shareholder (excluding a Shareholder covered by section 9 below) that requests a Reduced Withholding Tax Rate, will also need to provide the Agent with its updated shareholders register as of March 30^th, 2026, and a statement confirming that more than 75% of its shareholders, directly or indirectly, are individuals of its state of residence for the tax year 2025.

A publicly traded non-Israeli corporate Shareholder whose shares are traded on a stock market outside of Israel and is a resident of a Treaty State, or a direct or indirect subsidiary of such Shareholder, will also provide the Agent with a declaration that it is a resident of such Treaty State or another non-Israeli state for the tax year 2025, as applicable.

An Israeli corporate Shareholder which is entitled to a Reduced Withholding Tax Rate (including an exemption from withholding tax at source), will be able to apply to the Agent no later than May 9^th, 2026, (the end of the Change of Rate Period) and enclose an applicable valid ITA issued certificate setting forth a Reduced Withholding Tax Rate or an exemption from withholding tax. In addition, such Shareholder will enclose its certificate of incorporation and all other documents required as set forth above, mutatis mutandis as requested by the Agent.

The Agent is entitled to request from the Shareholders applying for a Reduced Withholding Tax Rate additional documents in its discretion insofar as they are required to establish the tax residence of the Shareholder or its entitlement to exemption and/or to a Reduced Withholding Tax Rate.

Notwithstanding the foregoing, no refund of excess tax withholding shall be affected by the Agent with respect to any Shareholder holding more than 5% of the issued share capital of the Company, or whose entitlement to dividend from the Company pursuant to the Dividend exceeds $500,000, other than in accordance with a specific approval issued by the ITA.

The transfer of the amounts withheld, excluding the amounts returned to the Shareholders, as aforementioned, shall be conducted by the Agent. Subject to receipt by the Agent the required documentation, the Agent will return the amounts withheld to the Shareholders as detailed above to the account at which the dividend payment was made within 30 days from the date the amounts withheld are paid to the ITA.

The Ruling aims to address solely the issue of tax withholding procedures and should not be construed as setting the actual tax liability of any Shareholder with respect to the Dividend or otherwise.