AtaiBeckley Inc. Income Taxes Disclosure
17. Income Taxes
As noted above in Note 1, Organization and Description of Business, on December 30, 2025, the Company completed the Redomiciliation Transaction. Pursuant to the Redomiciliation Transaction, the Company’s tax residency changed from Germany to the United States.
Loss Before Income Taxes and Loss from Equity Method Investments
The components of loss from continuing operations before income taxes and loss from equity method investments by tax jurisdiction for the year ended December 31, 2025 is as follows (in thousands):
|
|
Year Ended |
|
|
United States |
|
$ |
(64,645 |
) |
Foreign |
|
|
(595,204 |
) |
Total loss before income taxes and loss from equity method investments |
|
$ |
(659,849 |
) |
The components of loss from continuing operations before income taxes and loss from equity method investments by tax jurisdiction for the year ended December 31, 2024 was as follows (in thousands):
|
|
Year Ended |
|
|
Germany |
|
$ |
(95,551 |
) |
International |
|
|
(52,854 |
) |
Total loss before income taxes and loss from equity method investments |
|
$ |
(148,405 |
) |
Total Benefit From (Provision For) Income Taxes
The total tax provision for income taxes for the year ended December 31, 2025 consists of the following (in thousands):
|
Year Ended |
|
|
Current benefit from (provision for) income taxes: |
|
|
|
United States |
$ |
(15 |
) |
United States State & Local |
|
(147 |
) |
International |
|
(136 |
) |
Total current benefit from (provision for) income taxes |
$ |
(298 |
) |
Deferred income tax benefit (provision): |
|
|
|
United States |
$ |
— |
|
United States State & Local |
|
— |
|
International |
|
— |
|
Total deferred income tax benefit (provision) |
$ |
— |
|
Total income tax benefit (provision): |
|
|
|
United States |
$ |
(15 |
) |
United States State & Local |
|
(147 |
) |
International |
|
(136 |
) |
Total income tax benefit (provision) |
$ |
(298 |
) |
The total tax benefit from income taxes for the year ended December 31, 2024 consists of the following (in thousands):
|
Year Ended |
|
|
Current benefit from (provision for) income taxes: |
|
|
|
Germany |
$ |
— |
|
International |
|
356 |
|
Total current benefit from (provision for) income taxes: |
$ |
356 |
|
Deferred income tax benefit (provision): |
|
|
|
Germany |
$ |
— |
|
International |
|
— |
|
Total deferred income tax benefit (provision) |
$ |
— |
|
Total income tax benefit (provision): |
|
|
|
Germany |
$ |
— |
|
International |
|
356 |
|
Total income tax benefit (provision) |
$ |
356 |
|
The total current tax benefit from (provision for) income taxes for December 31, 2025 and 2024 is comprised of corporate income taxes incurred in United States, United Kingdom and Australia.
Statutory Income Tax Rate Reconciliation
A reconciliation of the statutory income tax rate to the Company’s effective income tax rate for continuing operations for the year ended December 31, 2025, after the adoption of ASU 2023-09 as described in Note 2, Basis of Presentation, Consolidation and Summary of Significant Accounting Policies, is as follows (in thousands, except percentages):
|
Year Ended |
||||
|
Amount |
|
|
Percent |
|
U.S federal statutory tax rate: |
$ |
(138,572 |
) |
|
21.00% |
|
|
|
|
|
|
State and local income tax, net of national income tax effect* |
|
141 |
|
|
(0.02)% |
International tax effects: |
|
|
|
|
|
Germany: |
|
|
|
|
|
Statutory tax rate difference |
|
(1,529 |
) |
|
0.23% |
Changes in valuation allowances |
|
(22,485 |
) |
|
3.41% |
Effect of change of domicile |
|
27,581 |
|
|
(4.18)% |
Other |
|
(1,585 |
) |
|
0.24% |
Canada: |
|
|
|
|
|
Changes in valuation allowances |
|
(454 |
) |
|
0.07% |
Deferred tax adjustments |
|
572 |
|
|
(0.09)% |
Other |
|
14 |
|
|
(0.00)% |
United Kingdom: |
|
|
|
|
|
Statutory tax rate difference |
|
(21,050 |
) |
|
3.19% |
Changes in valuation allowances |
|
16,814 |
|
|
(2.55)% |
Non-deductible in-process research and development |
|
131,750 |
|
|
(19.97)% |
Effect of deferred tax adjustments |
|
(15,869 |
) |
|
2.40% |
Other |
|
(1,007 |
) |
|
0.15% |
Netherlands: |
|
|
|
|
|
Changes in valuation allowances |
|
747 |
|
|
(0.11)% |
Other |
|
9,993 |
|
|
(1.51)% |
Other international jurisdictions |
|
123 |
|
|
(0.02)% |
Changes in valuation allowances |
|
9,981 |
|
|
(1.51)% |
Nontaxable or Nondeductible Items: |
|
|
|
|
|
Effect of deferred tax adjustments |
|
3,276 |
|
|
(0.50)% |
Other |
|
341 |
|
|
(0.05)% |
Changes in unrecognized tax benefits |
|
1,517 |
|
|
(0.23)% |
Total income tax expense |
$ |
298 |
|
|
(0.05)% |
*California, New York State, and New York City make up the majority (greater than 50%) of the tax effect in this category
A reconciliation of the statutory income tax rate to the Company’s effective income tax rate for continuing operations for the year ended December 31, 2024, prior to the adoption of ASU 2023-09 as described in Note 2, Basis of Presentation, Consolidation and Summary of Significant Accounting Policies, is as follows (in thousands, except percentages):
|
|
Year Ended |
|
|
Loss before income taxes: |
|
|
|
|
Germany |
|
$ |
(96,160 |
) |
International |
|
|
(52,245 |
) |
Total loss before income taxes: |
|
|
(148,405 |
) |
German statutory rate |
|
|
30.18 |
% |
Expected income tax expense (benefit) |
|
|
(44,781 |
) |
|
|
|
|
|
US state income taxes, net of US federal tax benefit |
|
$ |
(1,010 |
) |
International tax rate differential |
|
|
4,589 |
|
Effect of Australian R&D tax credit incentives |
|
|
(134 |
) |
Effect of consolidation and deconsolidation of subsidiaries |
|
|
88 |
|
Effect of share-based compensation expense |
|
|
305 |
|
Compensation expenses not deductible under IRC Section 162(m) |
|
|
975 |
|
Expenses not deductible for tax purposes |
|
|
525 |
|
Return to provision and deferred tax adjustments |
|
|
(10,438 |
) |
Uncertain Tax Positions |
|
|
(22 |
) |
Change in German and International valuation allowance |
|
|
49,547 |
|
Total income tax expense |
|
$ |
(356 |
) |
|
|
|
|
|
Effective income tax rate: |
|
|
0.25 |
% |
As of December 31, 2025 the company is headquartered in New York City, United States and has subsidiaries in Germany, Australia, the United Kingdom, and Canada as well as minority investments in Canada, Germany, and the United Kingdom. The Company incurred tax losses in most jurisdictions, however, generated taxable profits in certain United States subsidiaries and Australian subsidiaries. The weighted-average United States corporate income tax rate for year ended December 31, 2025 and 2024 was 21.00%. The weighted-average combined German corporate income tax rate for the year ended December 31, 2025 and 2024 was 30.18% (inclusive of a corporate income tax rate of 15.00%, solidarity surcharge of 0.83%, and trade tax rate of 14.35%). The weighted-average Australia corporate income tax rate for the year ended December 31, 2025 and 2024 was 25%. In 2025 it was noted that Atai Therapeutics Pty Ltd, Kures Australia Pty Ltd, and Empathbio Australia Pty Ltd. would not qualify for the reduced rate under the base rate entity ("BRE") test as the amount of passive income exceeds 90% of total income. These entities were therefore subject to a 30% tax rate. The weighted-average United Kingdom corporate income tax rate for the year ended December 31, 2025 and 2024 was 25.00%. The combined Canada federal and provincial corporate income tax rate for the year ended December 31, 2025 and 2024 was 26.5%. The weighted-average Netherlands corporate income tax rate for the year ended December 31, 2025 was 16.00%.
Upon adoption of ASU 2023-09 as described in Note 2, Basis of Presentation, Consolidation and Summary of Significant Accounting Policies, cash paid for income taxes, net of refunds, during the year ended December 31, 2025 was as follows:
|
Year Ended |
|
|
Income taxes paid |
|
|
|
United States |
$ |
89 |
|
United States State & Local |
|
286 |
|
Foreign |
|
214 |
|
Total income taxes paid |
$ |
589 |
|
Income taxes paid (net of refunds) exceeded 5 percent of total income taxes paid (net of refunds) in the following jurisdictions:
|
|
|
|
|
Year Ended |
|
|
United States - States & Local |
|
|
|
New York |
$ |
120 |
|
New York City |
|
107 |
|
|
|
|
|
Foreign |
|
|
|
United Kingdom |
$ |
214 |
|
Deferred Income Taxes
Deferred income taxes are provided for the effects of temporary differences between the amounts of assets and liabilities recognized for financial reporting purposes and the amounts recognized for income tax purposes.
Significant components of deferred tax assets and deferred tax liabilities consisted of the following for the year ended December 31, 2025 (in thousands):
|
|
Year Ended |
|
|
Deferred tax assets: |
|
|
|
|
U.S tax loss carryforwards |
|
$ |
27,740 |
|
Foreign tax loss carryforwards |
|
|
65,756 |
|
Share compensation |
|
|
31,428 |
|
Capitalized research and experimentation expenses |
|
|
39,023 |
|
Other deductible timing differences |
|
|
1,494 |
|
Total deferred tax assets, gross |
|
|
165,441 |
|
Valuation allowance |
|
|
(147,624 |
) |
Total deferred tax assets, net |
|
$ |
17,817 |
|
|
|
|
|
|
Deferred tax liabilities: |
|
|
|
|
Fixed and intangible assets |
|
$ |
(1,513 |
) |
Unrealized foreign exchange |
|
|
(5,217 |
) |
Outside basis differences in equity and other investments |
|
|
(3,299 |
) |
Investments |
|
|
(7,765 |
) |
Other timing differences |
|
|
(23 |
) |
Total deferred tax liabilities |
|
|
(17,817 |
) |
Total deferred tax asset (liability) |
|
$ |
— |
|
Significant components of deferred tax assets and deferred tax liabilities consisted of the following for the year ended December 31, 2024 (in thousands):
|
|
Year Ended |
|
|
Deferred tax assets: |
|
|
|
|
German tax loss carryforwards |
|
$ |
55,507 |
|
International tax loss carryforwards |
|
|
26,869 |
|
Share compensation |
|
|
39,975 |
|
Capitalized research and experimentation expenses |
|
|
31,010 |
|
Other deductible timing differences |
|
|
1,300 |
|
Total deferred tax assets, gross |
|
|
154,661 |
|
Valuation allowance |
|
|
(139,514 |
) |
Total deferred tax assets, net |
|
$ |
15,147 |
|
|
|
|
|
|
Deferred tax liabilities: |
|
|
|
|
Fixed and intangible assets |
|
$ |
(1,626 |
) |
Unrealized foreign exchange |
|
|
(6,571 |
) |
Outside basis differences in equity and other investments |
|
|
(2 |
) |
Investments |
|
|
(6,948 |
) |
Total deferred tax liabilities |
|
|
(15,147 |
) |
Total deferred tax asset (liability) |
|
$ |
— |
|
The valuation allowance provided against net deferred tax assets as of December 31, 2025 and 2024 was $147.6 million and $139.5 million, respectively. The valuation allowance recorded at both periods was primarily related to United States and foreign tax loss carryforwards, capitalized research and experimental costs, and stock-based compensation timing differences that, in the judgment of management, are not more-likely-than-not, to be realized.
As relevant to certain United States subsidiaries, the Tax Cuts and Jobs Act of 2017 requires taxpayers to capitalize and amortize certain research and experimental (“R&D”) expenditures under Internal Revenue Code ("IRC") Section 174 for tax years beginning after December 31, 2021 resulting in the capitalization of certain R&D costs within the Company's tax provision in 2024. IRC Section 174 costs attributable to R&D performed in the United States and outside of the United States are amortizable over 5 years and 15 years, respectively. The majority of the Company's R&D costs incurred in 2024 were performed outside of the United States and are amortizable over a 15 year period.
On July 4, 2025, the One Big Beautiful Bill Act of 2025 (the “Tax Act”) was signed into law. The Tax Act includes substantial changes to the U.S. federal tax code and broader fiscal policy for tax years 2025 and forward. The Company has recorded any applicable impacts to its tax provision for the year ended December 31, 2025, and determined that the impact is not significant. There are several provisions of the Tax Act that do not go into effect until future tax years but are also not expected to have significant impact on tax positions as currently recorded.
In assessing the realizability of deferred tax assets, management regularly considers whether it is more-likely-than-not that some or all of the recorded deferred tax assets will be realized. The future realization of deferred tax assets is subject to the existence of sufficient taxable income of the appropriate character (e.g., ordinary income or capital gain) as provided under the carryforward provisions of local tax law. Additionally, deferred tax assets with respect to tax losses in the United States may be subject to limitation as a result of ownership changes within the meaning of Section 382 of the IRC. Management considers the Company’s limited history and historical tax losses, future projected taxable income, including the character and jurisdiction of such income, the scheduled reversal of deferred tax liabilities (including the effect in available carryback and carryforward periods), and tax-planning strategies in making this assessment. In the event that there is a change in the ability to recover deferred tax assets, the Company’s income tax provision would increase or decrease in the period in which the assessment is changed.
The Company has limited prior earnings history and, due to the early stages of its development and research activities, is expected to generate losses for the next several years and cannot accurately estimate future profit projections beyond such time. As such, management believes that it is more likely than not that the Company will not realize the benefits of such tax loss carryforwards and deductible differences.
As of December 31, 2025 and 2024 the Company did not have any significant unremitted earnings in its foreign subsidiaries.
The Company’s gross tax loss carryforward for tax return purposes are as follows for the year ended December 31, 2025 (in thousands):
|
|
Year Ended |
|
|
U.S. tax losses |
|
$ |
99,701 |
|
Foreign tax losses |
|
|
232,357 |
|
Total |
|
$ |
332,058 |
|
The Company’s gross tax loss carryforward for tax return purposes are as follows for the year ended December 31, 2024 (in thousands):
|
|
Year Ended |
|
|
Germany tax losses |
|
$ |
183,952 |
|
International tax losses |
|
|
97,985 |
|
Total |
|
$ |
281,937 |
|
The Company's tax loss carryforwards have an indefinite carryforward period, however, for tax years 2021 and beyond, in the United States, utilization of certain tax losses may not exceed 80% of United States taxable income in any one year, computed without regard a deduction for tax losses utilized.
The Company's 2021 through 2024 tax returns are currently open to audit. The 2021 tax return for Perception Neuroscience Holdings, Inc. was under routine audit by the Internal Revenue Service and was settled in 2024. The 2021 atai Life Sciences GmbH, the 2022 atai Life Sciences N.V., and the 2022 Kures Australia Pty Ltd tax returns are currently under audit.
Unrecognized tax benefits arise when the estimated benefit recorded in the financial statements differs from the amounts taken or expected to be taken in a tax return because of the uncertainties described above. As of December 31, 2025 and 2024, the Company notes the following unrecognized tax benefits (in thousands).
|
|
Year Ended |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Balance as of December 31, 2024 |
|
$ |
— |
|
|
$ |
369 |
|
Increases—prior year tax positions |
|
|
1,517 |
|
|
|
— |
|
Decreases—prior year tax positions |
|
|
— |
|
|
|
(369 |
) |
Increases—current year tax positions |
|
|
|
|
|
— |
|
|
Balance as of December 31, 2025 |
|
$ |
1,517 |
|
|
$ |
— |
|
The balances of unrecognized tax benefits as of December 31, 2025 is $1.5 million, which relates to expected loss of tax attributes due to an in process audit examination. The unrecognized tax benefits as of December 31, 2024 were decreased as the company has settled the audit of the 2021 tax return for Perception.
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.