Company: TSEM
Filing Date: 2025-04-30
Form Type: 20-F
Source: 0001178913-25-001537
Chunk: 119

Company: TOWER SEMICONDUCTOR LTD
Filing Date: 2025-04-30
Form: 20-F
Item: Item 3
Chunk 119
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 “passive
income”, as defined in the relevant provisions of the Code; or (ii) on average, at least 50% of our assets (generally determined
on a quarterly basis) produce or are held for the production of passive income. For this purpose, passive income includes dividend, interest,
royalty, rent, and annuity income and the excess of gains over losses from the disposition of assets which produce passive income. If
we were determined to be a PFIC for U. S. federal income tax purposes, highly complex rules would apply to U. S. Holders owning ordinary
shares.

Based on our estimated gross income, the average value of our gross
assets and the nature of our business, we do not believe that we will be classified as a PFIC in the current taxable year. Our status
in any taxable year will depend on our assets and activities in each year and because this is a factual determination made annually at
the end of each taxable year, there can be no assurance that we will not be considered a PFIC for any future taxable year. If we were
treated as a PFIC in any year during which a U. S. Holder owns ordinary shares, such U. S. Holder may be subject to materially adverse tax
consequences, including additional U. S. federal income tax liability and tax filing obligations. Given our current business plans, however,
we do not expect that we will be classified as a PFIC in future years.

You are urged to consult your own tax advisor regarding
the possibility of us being classified as a PFIC and the potential tax consequences arising from the ownership and disposition (directly
or indirectly) of an interest in a PFIC.

Information Reporting and Back-up Withholding.

Holders generally will be subject to information reporting requirements
with respect to dividends paid in the United States on ordinary shares. In addition, Holders will be subject to back-up withholding tax
on dividends paid in the United States on ordinary shares unless the holder provides an IRS certification or otherwise establishes an
exemption. Holders will be subject to information reporting and back-up withholding tax on proceeds paid within the United States from
the disposition of ordinary shares unless the holder provides an IRS certification or otherwise establishes an exemption. Information
reporting and back-up withholding may also apply to dividends and proceeds paid outside the United States that are paid by certain “ U. S.
payors” or “ U. S. middlemen,” as defined in the applicable Treasury regulations,