DOW CHEMICAL CO /DE/

NOTE 7 –INCOME TAXES

As the financial statements for Dow Inc. and TDCC are substantially similar, including the provision for income taxes, the following income tax discussion does not include reference to TDCC's provision for income taxes or its effective tax rate.

The Company's effective tax rate fluctuates based on, among other factors, where income is earned, the level of income relative to tax attributes and the level of equity earnings, since most earnings from the Company's equity method investments are taxed at the joint venture level.

In the second quarter of 2025, the Company reported a provision for income taxes of $142 million, resulting in a negative effective tax rate of 21.5 percent ($150 million in the second quarter of 2024, resulting in an effective tax rate of 24.7 percent). For the first six months of 2025, the Company reported a provision for income taxes of $58 million, resulting in a negative effective tax rate of 5.6 percent ($61 million for the first six months of 2024, resulting in an effective tax rate of 5.8 percent).

The provision for income taxes for the three and six months ended June 30, 2025 was unfavorably impacted by the recording of valuation allowances in certain foreign jurisdictions of $242 million as well as losses attributable to jurisdictions for which no tax benefit can be recognized, and a tax credit of $89 million related to the sale of a portion of the Company's membership interest in its wholly owned subsidiary, Diamond Infrastructure Solutions, resulting in a negative effective tax rate for both periods. See Note 17 for additional information related to the Diamond Infrastructure Solutions transaction. In the first quarter of 2024, the Company recorded a tax credit of $194 million related to a reassessment of interest and penalties on a tax matter in a foreign jurisdiction, resulting in a reduced effective tax rate for the first six months of 2024.