Company: CMRE-PC
Filing Date: 2025-02-20
Form Type: 20-F
Source: 0001140361-25-005199
Chunk: 204

Company: Costamare Inc.
Filing Date: 2025-02-20
Form: 20-F
Item: Item 10
Chunk 204
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 Shipping Income
 
Subject to the discussion of “effectively connected” income below, unless exempt from U.S. Federal income tax under the rules contained in Section 883 of the Code and the Treasury Regulations promulgated thereunder, a non-U.S. corporation is, under the rules of Section 887 of the Code, subject to a 4% U.S. Federal income tax in respect of its U.S. source gross transportation income (without the allowance for deductions).
 
For this purpose, U.S. source gross transportation income includes 50% of the shipping income that is attributable to transportation that begins or ends (but that does not both begin and end) in the United States. Shipping income attributable to transportation exclusively between non-U.S. ports is generally not subject to any U.S. Federal income tax.
 
“Shipping income” means income that is derived from:
 

(a)   the use of vessels;
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(b)   the hiring or leasing of vessels for use on a time, operating or bareboat charter basis;
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(c)   the participation in a pool, partnership, strategic alliance, joint operating agreement or other joint venture it directly or indirectly owns or participates in that generates such income; or
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(d)   the performance of services directly related to those uses.
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Under Section 883 of the Code and the Treasury Regulations promulgated thereunder, a non-U.S. corporation will be exempt from U.S. Federal income tax on its U.S. source gross transportation income if:
 

(a)   it is organized in a foreign country (or the “country of organization”) that grants an “equivalent exemption” to U.S. corporations; and
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(b)   either
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(i)   more than 50% of the value of its stock is owned, directly or indirectly, by individuals who are “residents” of our country of organization or of another foreign country that grants an “equivalent exemption” to U.S.
                                                                                                          corporations; or                                                                                                   
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(ii)   its stock is “primarily and regularly traded on an established securities market” in its country of organization, in another country that grants an “equivalent exemption” to U.S. corporations, or in the United States.
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We believe that we have qualified and currently intend to continue to qualify for this statutory tax exemption for the foreseeable future. However, no assurance can be given that this