Company: TSEM
Filing Date: 2025-04-30
Form Type: 20-F
Source: 0001178913-25-001537
Chunk: 117

Company: TOWER SEMICONDUCTOR LTD
Filing Date: 2025-04-30
Form: 20-F
Item: Item 3
Chunk 117
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 “passive
foreign investment company” for U. S. federal income tax purposes. We do not believe that we will be classified as a “passive
foreign investment company” for U. S. federal income tax purposes for our current taxable year (see “ Passive Foreign Investment
Companies” below). In addition, under IRS Notice 2003-71, ordinary shares are considered to be readily tradable on an established
securities market in the United States if they are listed on the Nasdaq Global Market, as our ordinary shares are, but we cannot guarantee
that our ordinary shares will always be so listed.

Subject to the discussion below under “ Information Reporting
and Back-up Withholding,” a Non-U. S. Holder generally will not be subject to U. S. federal income or withholding tax on dividends
received on ordinary shares unless that income is effectively connected with the conduct by that Non-U. S. Holder of a trade or business
in the United States.

75

Foreign Tax Credit

Any dividend income resulting from distributions we pay to a U. S.
Holder with respect to the ordinary shares generally will be treated as foreign source income for U. S. foreign tax credit purposes, which
may be relevant in calculating such holder’s foreign tax credit limitation. Subject to certain conditions and limitations, Israeli
tax withheld on dividends may be deducted from taxable income or credited against a U. S. Holder’s U. S. federal income tax liability.
The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. For this purpose,
dividends that we distribute generally should constitute “passive category income,” or, in the case of certain U. S. Holders,
“general category income.” A foreign tax credit for foreign taxes imposed on distributions may be denied if the taxpayer does
not satisfy certain minimum holding period requirements. The rules relating to the determination of foreign source income and the foreign
tax credit are complex, and the availability of a foreign tax credit depends on numerous factors. Each prospective purchaser who would
be a U. S. Holder should consult with its own tax advisor to determine whether its income with respect to the ordinary shares would be
foreign source income and whether and to what extent that purchaser would be entitled to the credit.

Disposition of Ordinary Shares

Subject to the discussion below under the heading “ Passive
Foreign Investment Companies,” upon the sale or other disposition of ordinary shares, a U. S. Holder generally will recognize capital
gains or loss equal to the