International Seaways Inc

INSW is incorporated in the Republic of the Marshall Islands and pursuant to the laws of the Marshall Islands, the Company is not subject to income tax in the Marshall Islands. All of the Company’s vessels are owned or operated by non-U.S. corporations that are subsidiaries of INSW.

U.S. Income Tax

The following summary of the principal U.S. income tax laws applicable to the Company, as well as the conclusions regarding certain issues of income tax law, are based on the provisions of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), existing and proposed U.S. Treasury Department regulations, administrative rulings, pronouncements and judicial decisions, all as of the date of this Annual Report on Form 10-K. No assurance can be given that changes in or interpretation of existing laws will not occur or will not be retroactive or that anticipated future circumstances will in fact occur.

INSW derives substantially all of its gross income from the use and operation of vessels in international commerce. This income principally consists of hire from time and voyage charters for the transportation of cargoes and the performance of services directly related thereto, which is referred to herein as “shipping income.”

INSW’s vessels operate in various parts of the world, including to or from U.S. ports. Shipping income that is attributable to transportation that begins or ends, but that does not both begin and end, in the United States will be considered to be 50% derived from sources within the United States. Shipping income attributable to transportation that both begins and ends in the U.S. will be considered to be 100% derived from sources within the United States. INSW does not engage in transportation that gives rise to 100% U.S. source income. Shipping income attributable to transportation exclusively between non-U.S. ports will be considered to be 100% derived from sources outside the United States and will generally not be subject to any U.S. federal income tax.

In 2024 and prior years, INSW was exempt from taxation on its U.S. source shipping income under Section 883 of the Code and the corresponding Treasury regulations. For 2025 and future years, INSW will need to evaluate its qualification for exemption under Section 883 and there can be no assurance that INSW will continue to qualify for the exemption.

Our qualification for the exemption under Section 883 is described in more detail under “Risk Factors — Risks Related to Legal and Regulatory Matters —We may be subject to U.S. federal income tax on U.S. source shipping income, which would reduce our net income and cash flows.” To the extent INSW is unable to qualify for exemption from tax under Section 883, INSW will be subject to U.S. federal income taxation of 4% of its U.S. source shipping income on a gross basis without the benefit of deductions.

To the extent the Company (a) has, or is considered to have, a fixed place of business in the U.S. involved in the earning of U.S. source shipping income, and (b) substantially all of the Company’s U.S. source shipping income is attributable to regularly scheduled transportation, such as the operation of a vessel that follows a recurring schedule of voyages that begin or end in the U.S., the Company’s U.S. source shipping income, together with other U.S. source income, is considered to be effectively connected income. Currently, income effective connected with such a trade or business is subject to U.S. federal corporate income tax imposed at a 21% rate and the Company may also be subject to a 30% branch profits tax on such income. The Company does not have any vessel with recurring voyages that begin or end in the U.S. on a regularly scheduled basis. Therefore, the Company believes that none of its U.S. source shipping income constitute effectively connected income.

Global Minimum Tax

In December 2021, the Organization for Economic Co-operation and Development (“OECD”) issued Model Rules for implementation of a 15% minimum tax for multinational enterprises as part of its initiative intended to address the tax challenges arising from globalization. A number of countries have adopted the OECD’s minimum tax rules and have implemented these rules or local versions of these rules effective January 1, 2024. None of the Company’s subsidiaries are domiciled in such jurisdictions as of December 31, 2024. The application of the rules continues to evolve, and the adoption of these rules by countries in which subsidiaries of the Company are domiciled may alter our tax obligations in certain jurisdictions in which we operate. We continue to evaluate the impact of these rules and are currently evaluating a variety of mitigating actions to reduce the potential impact.