v3.26.3
Income Taxes
 6 Months Ended
Jun. 30, 2026
Income Taxes [Abstract]  
Income Taxes
24.
Income Taxes:

Castor and certain of its subsidiaries are incorporated under the laws of the Republic of the Marshall Islands but are not subject to income taxes in the Republic of the Marshall Islands. Castor’s ship-owning subsidiaries are subject to registration and tonnage taxes, which have been included in “Vessel operating expenses” in the accompanying unaudited interim condensed consolidated statements of comprehensive income.

Moreover, details of the Company’s U.S. source gross transportation income tax are discussed in Note 25 to the Company’s consolidated financial statements for the year ended December 31, 2025, included in the 2025 Annual Report. For the six months ended June 30, 2025, and 2026, the Company recorded a provision of $2,823 and $23,962 for U.S. source gross transportation income tax, included in “Income taxes”, in the accompanying condensed consolidated interim statements of comprehensive income.

Income Taxes relating to MPC Capital
During the reporting period, the income before taxes for the asset management segment of the Company is mostly generated in Germany.

A summary of the provision for income taxes is as follows:
   
December 31, 2025
   
June 30, 2026
 
Corporate Income tax
  
$
1,272,361
    
$
1,124,205
  
Trade tax
    
2,059,361
      
2,656,912
  
Other
    
146,615
      
139,868
  
Total provision for income taxes
  
$
3,478,337
    
$
3,920,985
  

The income tax receivable on the face of the unaudited condensed consolidated balance sheet is primarily due to refundable withholding taxes on profit distributions in the amount of $15,175,564.

The significant components of income tax expenses are as follows:
   
Six months ended
June 30, 2025
    
Six months ended
June 30, 2026
  
Current tax expense (or benefit)
   $ 972,878    
$
480,772
  
Deferred tax expense (or benefit)
     (373,568 )    
1,677,938
  
Total income tax expense
   $ 599,310    
$
2,158,710
  
 
The income tax expense (or benefit) is disaggregated as follows:
   
Six months ended
June 30, 2025
    
Six months ended
June 30, 2026
  
Federal (CIT)
   $ (274,297 )   $
130,458  
State and Local (TT)
     633,122       1,748,535  
Foreign
     262,295       270,350  
Other     (21,810 )     9,367  
Total income tax expense
   $ 599,310     $
2,158,710  

The local income taxes relate mainly to the Free and Hanseatic City of Hamburg, one of the federal states of the Federal Republic of Germany.
Effective Income Tax Rate Reconciliation
A reconciliation of the German statutory income tax rate to the actual effective income tax rate is provided below:
   
Six months ended June 30, 2026
  
   
%
    
$  
German statutory Corporate Income tax rate
    
15.83
    
$
11,287,657
  
State and local income tax
    
2.45
      
1,748,535
  
Foreign tax effects
     (0.27 )     (194,839 )
Changes in valuation allowances
     (0.42 )     (298,190 )
Nontaxable or nondeductible items
    
(13.47
)
    
(9,607,335
)
Adjustments to prior year tax estimates
     (0.88 )     (624,173 )
Other
    
(0.21
)
    
(152,945
)
Effective income tax rate
    
3.03
    
$
2,158,710
  

State and local income taxes resulting from trade tax are mainly levied by the Free and Hanseatic City of Hamburg.
Tax nontaxable items are related to dividend payments and capital gains from corporate companies which are in principle not subject to taxation.
Deferred Taxes
The significant components of the Company’s deferred tax account balances relate to temporary differences and are as follows:

 
December 31, 2025
    
June 30, 2026
  
Deferred tax assets
            
Receivables due from related parties
  
$
2,004,466
    
$
679,439
  
Intangible assets
    
2,813,526
      
2,489,993
  
Right of use assets
    
2,237,527
      
2,013,859
  
Provisions
    
1,126,281
      
1,098,644
  
Loss carrying forwards
     2,329,454      
6,538,586
  
Prepaid expenses and other assets
    
785,355
      
789,036
  
Other
    
120,166
      
282,149
  
Total deferred tax assets
    
11,416,775
      
13,891,706
  
Valuation allowances
    
(3,541,310
)
    
(6,890,887
)
Deferred tax assets, net of valuation allowances
    
7,875,465
      
7,000,819
  
Offsetting
    
(5,276,138
)
    
(5,088,432
)
Deferred tax assets, net of valuation allowances per balance sheet
  
$
2,599,327
    
$
1,912,387
  

               
Deferred tax liabilities
                
Property, plant and equipment
   $
243,713     $
133,747  
Equity instrument investments
  

6,583,988
    

5,402,222
  
Intangible assets
    
5,867,921
      
7,741,426
  
Lease liabilities
    
2,237,527
      
2,013,859
  
Long-term debt
     515,900       577,924  
Other
    
423,319
      
347,905
  
Total deferred tax liabilities
    
15,872,368
      
16,217,083
  
Offsetting
    
(5,276,138
)
    
(5,088,432
)
Deferred tax liabilities per balance sheet
  
$
10,596,230
    
$
11,128,651
  

               
Net deferred tax liabilities
  
$
7,996,903
    
$
9,216,264
  

Uncertain Tax Positions
The benefits of uncertain tax positions are recorded in the Company’s consolidated financial statements only after determining a more-likely-than-not probability that the uncertain tax positions will withstand challenge from the tax authorities.
The Company files income tax returns in Germany, the Netherlands, Panama and Colombia and is subject to examinations by tax authorities. The Company believes that its income tax reserves are adequately maintained. However, the final determination of the Company tax returns, if audited, is uncertain and therefore there is a possibility for a change of the Company`s estimate in the future. There were no unrecognized tax benefits as of June 30, 2025 and 2026, and there were no changes in the reporting periods. The Company accrues interest and penalties related to underpayment of income taxes within the provision for income taxes.