BeOne Medicines Ltd.ONC
BeOne Medicines Ltd. Income Taxes Disclosure
Income Taxes
The components of income (loss) before income taxes are as follows:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| $ | $ | $ | |||||||||||||||
| Switzerland | 189,967 | 277,710 | (21,368) | ||||||||||||||
| U.S. | 203,189 | 201,516 | 117,446 | ||||||||||||||
| PRC | (66,300) | (263,159) | (315,852) | ||||||||||||||
| Other | 89,998 | (749,068) | (606,062) | ||||||||||||||
| Total | 416,854 | (533,001) | (825,836) | ||||||||||||||
The current and deferred components of the income tax expense (benefit) from continuing operations are as follows:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| $ | $ | $ | |||||||||||||||
| Current tax expense | |||||||||||||||||
| Switzerland | 82 | 2 | 88 | ||||||||||||||
| U.S. | 39,305 | 57,222 | 25,170 | ||||||||||||||
| PRC | 23,133 | 12,331 | 24,956 | ||||||||||||||
| Other | 57,932 | 16,223 | 4,971 | ||||||||||||||
| Total | 120,452 | 85,778 | 55,185 | ||||||||||||||
| Deferred tax expense (benefit) | |||||||||||||||||
| Switzerland | — | — | — | ||||||||||||||
| U.S. | 6,039 | 23,556 | — | ||||||||||||||
| PRC | 5,450 | 180 | 687 | ||||||||||||||
| Other | (2,020) | 2,271 | — | ||||||||||||||
| Total | 9,469 | 26,007 | 687 | ||||||||||||||
| Income tax expense | 129,921 | 111,785 | 55,872 | ||||||||||||||
The Company established tax residency in Switzerland upon the Continuation and adopted ASU 2023-09 on a prospective basis beginning with the year ended December 31, 2025. The following table presents the required disclosure pursuant to ASC 2023-09 and reconciles the Switzerland federal statutory tax amount and rate to the Company’s actual global effective income tax amount and rate for the year ended December 31, 2025:
| Year Ended December 31, | |||||||||||
| 2025 | |||||||||||
| $ | Percent | ||||||||||
| Income before income taxes | 416,854 | ||||||||||
| Switzerland federal statutory tax rate | 35,433 | 8.5 | % | ||||||||
State and local income tax, net of federal income tax effect1 | (1,789) | (0.4) | % | ||||||||
| Foreign tax effects | |||||||||||
| United States | |||||||||||
| Statutory tax rate difference between the U.S. and Switzerland | 25,399 | 6.1 | % | ||||||||
State and local income tax, net of federal income tax effect2 | 9,610 | 2.3 | % | ||||||||
| Share-based payment awards | (17,702) | (4.2) | % | ||||||||
| Foreign-derived intangible income | (15,337) | (3.7) | % | ||||||||
| Unremitted earnings | 6,039 | 1.4 | % | ||||||||
| Research tax credits and incentives | (35,048) | (8.4) | % | ||||||||
| Changes in valuation allowances | 47,084 | 11.3 | % | ||||||||
| Other | 960 | 0.2 | % | ||||||||
| China | |||||||||||
| Statutory tax rate difference between China and Switzerland | (2,122) | (0.5) | % | ||||||||
| Share-based payment awards | 37,822 | 9.1 | % | ||||||||
| Non-deductible business expenses | 12,676 | 3.0 | % | ||||||||
| Research tax credits and incentives | (23,404) | (5.6) | % | ||||||||
| Effect of changes in tax rates | 5,283 | 1.3 | % | ||||||||
| Deferred asset adjustment | 10,239 | 2.5 | % | ||||||||
| Changes in valuation allowances | (19,272) | (4.6) | % | ||||||||
| Other | 3,839 | 0.9 | % | ||||||||
| Australia | |||||||||||
| Statutory tax rate difference between Australia and Switzerland | 9,089 | 2.2 | % | ||||||||
| Share-based payment awards | 3,076 | 0.7 | % | ||||||||
| Changes in valuation allowances | 16,013 | 3.8 | % | ||||||||
| Other | 421 | 0.1 | % | ||||||||
| Germany | |||||||||||
| Statutory tax rate difference between Germany and Switzerland | 2,453 | 0.6 | % | ||||||||
| Share-based payment awards | 2,158 | 0.5 | % | ||||||||
| Other | (2,671) | (0.6) | % | ||||||||
| Italy | |||||||||||
| Changes in valuation allowances | 4,260 | 1.0 | % | ||||||||
| Other | 2,360 | 0.6 | % | ||||||||
| Cayman Islands | |||||||||||
| Statutory tax rate difference between Cayman Islands and Switzerland | 4,253 | 1.0 | % | ||||||||
| Other | 59 | 0.0 | % | ||||||||
| Japan | 1,928 | 0.5 | % | ||||||||
| Brazil | 1,827 | 0.4 | % | ||||||||
| Other foreign jurisdictions | 3,055 | 0.7 | % | ||||||||
| Changes in valuation allowance | (12,725) | (3.1) | % | ||||||||
| Changes in unrecognized tax benefits | 16,208 | 3.9 | % | ||||||||
| Other adjustments | (1,553) | (0.4) | % | ||||||||
| Effective tax rate | 129,921 | 31.2 | % | ||||||||
1.Local taxes in Basel-Stadt canton made up the majority (greater than 50%) of the tax effect in this category.
2.State taxes in Kentucky, Tennessee, New York, and New York City made up the majority (greater than 50%) of the tax effect in this category.
The following table presents the required disclosures prior to the adoption of ASU 2023-09 and reconciles the U.S. statutory tax rate to the Company’s effective income tax rate for the years ended December 31, 2024 and 2023:
| Year Ended December 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| $ | $ | ||||||||||
| Loss before tax | (533,001) | (825,836) | |||||||||
| U.S. statutory tax rate | 21 | % | 21 | % | |||||||
| Expected taxation at U.S. statutory tax rate | (111,930) | (173,426) | |||||||||
| Foreign and preferential tax rate differential | 93,741 | 144,310 | |||||||||
| Non-deductible expenses | 1,130 | 19,134 | |||||||||
| Share-based payment awards | 53,446 | 32,581 | |||||||||
| State tax (benefit) | (7,988) | (5,872) | |||||||||
| Change in valuation allowance | 157,286 | 845,811 | |||||||||
| Tax relief credits | — | (704,928) | |||||||||
| Research tax credits and incentives | (43,602) | (64,343) | |||||||||
| Deductible research expenses | (13,644) | — | |||||||||
| Tax on unremitted earnings | 23,743 | — | |||||||||
| Foreign-derived intangible income | (40,397) | (37,395) | |||||||||
| Taxation for the year | 111,785 | 55,872 | |||||||||
| Effective tax rate | (21.0) | % | (6.8) | % | |||||||
Significant components of deferred tax assets (liabilities) are as follows:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| $ | $ | $ | |||||||||||||||
| Accruals and reserves | 168,454 | 121,549 | 106,708 | ||||||||||||||
| Net operating losses carryforward | 1,338,800 | 1,137,890 | 996,588 | ||||||||||||||
| Share-based compensation | 42,236 | 38,397 | 26,687 | ||||||||||||||
| Research tax credits | 40,224 | 34,561 | 68,117 | ||||||||||||||
| Tax relief credits | 704,928 | 704,928 | 704,928 | ||||||||||||||
| Intangible asset amortization | 1,020,858 | 1,081,442 | 699,974 | ||||||||||||||
| Lease liability | 14,960 | 11,882 | 7,893 | ||||||||||||||
| R&D and other capitalized costs | 361,557 | 277,061 | 164,190 | ||||||||||||||
| Total gross deferred tax assets | 3,692,017 | 3,407,710 | 2,775,085 | ||||||||||||||
| Less: valuation allowance | (3,648,017) | (3,403,505) | (2,771,470) | ||||||||||||||
| Net deferred tax assets | 44,000 | 4,205 | 3,615 | ||||||||||||||
| Property, plant and equipment, net | (53,199) | (10,795) | (12,374) | ||||||||||||||
| Tax on unremitted earnings | (29,995) | (23,735) | — | ||||||||||||||
| Right of use asset | (14,015) | (11,682) | (7,735) | ||||||||||||||
| Total gross deferred tax liabilities | (97,209) | (46,212) | (20,109) | ||||||||||||||
| Net deferred tax assets/(liabilities) | (53,209) | (42,007) | (16,494) | ||||||||||||||
Valuation allowances have been provided on deferred tax assets where, based on all available evidence, it was considered more likely than not that some portion or all of the recorded deferred tax assets will not be realized in future periods. After consideration of all positive and negative evidence, the Company believes that as of December 31, 2025, it is more likely than not that certain deferred tax assets will not be realized for the Company’s subsidiaries in Australia, Switzerland, the U.S. and certain subsidiaries in China. For the years ended December 31, 2025 and 2024, there was an increase in the valuation allowance of $158,816 and $157,286, respectively. Adjustments could be required in the future if the Company estimates that the amount of deferred tax assets to be realized is more or less than the net amount recorded.
During 2025, the Company reevaluated its indefinite reinvestment assertions and concluded that a portion of earnings from certain subsidiaries, primarily in the U.S., Canada, Argentina and Israel, are no longer indefinitely reinvested. Accordingly, the Company recognized a deferred tax liability of $29,995, representing the estimated withholding taxes that would be incurred upon the future distribution of these earnings. The Company continues to assert that earnings in its other jurisdictions remain indefinitely reinvested. The Company has not recorded a deferred tax liability for these jurisdictions because the determination of the amount of the associated unrecognized deferred tax liability is not practicable, as it depends on the timing, manner, and tax consequences of potential future distributions, all of which remain uncertain.
The valuation allowances for the years ended December 31, 2025, 2024 and 2023 were as follows:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| $ | $ | $ | |||||||||||||||
| Beginning balance, as of January 1 | 3,403,505 | 2,771,470 | 1,943,775 | ||||||||||||||
| Additions/(subtractions) charged to income tax provision | 158,816 | 157,286 | 845,811 | ||||||||||||||
| Additions/(subtractions) charged to equity | 50,721 | 497,823 | — | ||||||||||||||
| Currency translation and other | 34,975 | (23,074) | (18,116) | ||||||||||||||
| Ending balance, as of December 31 | 3,648,017 | 3,403,505 | 2,771,470 | ||||||||||||||
As of December 31, 2025 and 2024, the Company had net operating losses of approximately $7,598,546 and $6,720,659, respectively. As of December 31, 2025, net operating losses were primarily comprised of: $2,239,157 from entities in the PRC which expire in years 2026 through 2035; and $5,359,251 derived from Switzerland which expires in years 2026 through 2032. The Company has approximately $50,843 of U.S. research tax credits which will expire between 2037 and 2045 and approximately $704,928 of Switzerland tax relief credits which will expire in 2028, if not utilized.
The gross unrecognized tax benefits for the years ended December 31, 2025, 2024 and 2023 were as follows:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| $ | $ | $ | |||||||||||||||
| Beginning balance, as of January 1 | 17,239 | 14,264 | 11,555 | ||||||||||||||
| Additions based on tax positions related to prior tax years | 5,957 | — | — | ||||||||||||||
| Reductions based on tax positions related to prior tax years | — | — | — | ||||||||||||||
| Additions based on tax positions related to the current tax year | 4,639 | 2,975 | 2,709 | ||||||||||||||
| Reductions based on lapse of statute of limitations | — | — | — | ||||||||||||||
| Ending balance, as of December 31 | 27,835 | 17,239 | 14,264 | ||||||||||||||
Current and prior year additions include assessment of U.S. federal and state tax credits and incentives and intercompany positions taken in China. As of December 31, 2025, the Company had $27,835 of unrecognized tax benefits substantially all of which, if recognized, would reduce the effective tax rate. The Company does not anticipate that the amount of existing unrecognized tax benefits will significantly change within the next 12 months.
The Company has elected to record interest and penalties related to income taxes as a component of income tax expense. For the years ended December 31, 2025, the Company’s accrued interest and penalties were $2,676 related to positions taken in the U.S. and $3,264 related to positions taken in China. For the years ended December 31, 2024 and 2023, the Company’s accrued interest and penalties, where applicable, related to uncertain tax positions were not material.
The Company conducts business in a number of tax jurisdictions and, as such, is required to file income tax returns in multiple jurisdictions globally. As of December 31, 2025, Australia tax matters are open to examination for the years 2014 through 2025, China tax matters are open to examination for the years 2015 through 2025, Switzerland tax matters are open to examination for the years 2021 through 2025, and U.S. federal tax matters are open to examination for years 2016 through 2025. Other U.S. states and non-US tax jurisdictions in which the Company files tax returns remain open to examination for 2015 through 2025. Various U.S., foreign and state income tax returns are currently under examination by taxing authorities, with potential income tax liabilities estimated and updated in light of available facts and circumstances. Due to the uncertain and complex application of income tax regulations globally, it is possible that the ultimate resolution of audits may result in liabilities that could be materially different from original estimates. In such an event, the Company will record additional income tax expense or income tax benefit in the period in which such resolution occurs.
The following table summarizes income taxes paid, net of refunds received, for the year ended December 31, 2025, as required by ASU 2023-09:
| Year Ended December 31, | |||||
| 2025 | |||||
| $ | |||||
| U.S. federal | 40,500 | ||||
| U.S. state and local | |||||
| Kentucky | 6,065 | ||||
| Other | 3,831 | ||||
| Foreign | |||||
| China | 15,472 | ||||
| Australia | 14,575 | ||||
| Italy | 5,691 | ||||
| Other | 14,547 | ||||
| Total income taxes paid | 100,681 | ||||
The following table presents income taxes paid for the years ended December 31, 2024 and 2023:
| Year Ended December 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| $ | $ | ||||||||||
| Income taxes paid | 69,430 | 56,003 | |||||||||
The Company qualifies for the Technology Advanced Service Enterprises and High and New Technology Enterprise status for certain subsidiaries in China, which began to expire at the end of 2025. The income tax benefits attributable to this status for the year ended December 31, 2025 is approximately $5,953, or less than $0.01 per share outstanding.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Feb 26, 2024 | |
| 2022 | Feb 27, 2023 | |
| 2021 | Feb 28, 2022 | |
| 2020 | Feb 25, 2021 | |
| 2019 | Mar 2, 2020 | |
| 2018 | Feb 28, 2019 | |
| 2017 | Feb 28, 2018 | |
| 2016 | Mar 22, 2017 | |
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.