BIOMARIN PHARMACEUTICAL INCBMRN
BIOMARIN PHARMACEUTICAL INC Income Taxes Disclosure
INCOME TAXES
The Provision for Income Taxes was based on Income before Income Taxes as follows:
| Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| U.S. Source | $ | (262,617) | $ | 130,503 | $ | (453,840) | |||||||||||
| Non-U.S. Source | 745,097 | 411,260 | 642,403 | ||||||||||||||
Income before income taxes | $ | 482,480 | $ | 541,763 | $ | 188,563 | |||||||||||
The U.S. and foreign components of the Provision for Income Taxes were as follows:
| Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
Provision for income taxes | |||||||||||||||||
| Federal | $ | 32,428 | $ | 32,344 | $ | 25,120 | |||||||||||
| State and local | 11,528 | 8,813 | 5,098 | ||||||||||||||
| Foreign | 40,885 | 17,651 | 35,681 | ||||||||||||||
| 84,841 | 58,808 | 65,899 | |||||||||||||||
Provision for deferred income taxes: | |||||||||||||||||
| Federal | 5,498 | (2,117) | (70,754) | ||||||||||||||
| State and local | (5,148) | (5,166) | (8,030) | ||||||||||||||
| Foreign | 48,388 | 63,379 | 33,803 | ||||||||||||||
| 48,738 | 56,096 | (44,981) | |||||||||||||||
Provision for income taxes | $ | 133,579 | $ | 114,904 | $ | 20,918 | |||||||||||
The following is a reconciliation of the statutory federal income tax expense and rate to the Company’s effective tax rate for the year ended December 31, 2025:
Year Ended December 31, | |||||||||||
| 2025 | % | ||||||||||
| Federal Tax Expense | $ | 101,321 | 21.0% | ||||||||
State and local income taxes, net of federal income tax effect(1) | 1,413 | 0.3 | |||||||||
Foreign tax effects | |||||||||||
Ireland | |||||||||||
Statutory tax rate difference between Ireland and United States | (47,988) | (10.0) | |||||||||
| Other | (2,013) | (0.4) | |||||||||
| Other Foreign Jurisdictions | 2,927 | 0.6 | |||||||||
| Effects of changes in tax laws or rates enacted in the current period | |||||||||||
| Effect of cross-border tax laws | |||||||||||
| Global intangible low taxed income (GILTI) | 88,510 | 18.3 | |||||||||
| Foreign derived intangible income (FDII) | (30,052) | (6.2) | |||||||||
| Subpart F Income | 5,353 | 1.1 | |||||||||
| Tax credits | |||||||||||
| Foreign Tax Credits | (31,972) | (6.6) | |||||||||
Orphan Drug Credits | (13,638) | (2.8) | |||||||||
| R&D tax credits | (7,495) | (1.6) | |||||||||
| Changes in valuation allowances | 5,274 | 1.1 | |||||||||
| Nontaxable or nondeductible items | |||||||||||
Nondeductible IPR&D(2) | 45,709 | 9.5 | |||||||||
| Stock compensation expense | 16,225 | 3.4 | |||||||||
| 162m Addback | 6,764 | 1.4 | |||||||||
| Other | 1,198 | 0.3 | |||||||||
Changes in unrecognized tax benefits(3) | (8,969) | (1.9) | |||||||||
| Other Adjustments | 1,012 | 0.2 | |||||||||
| Effective Tax Rate | $ | 133,579 | 27.7% | ||||||||
(1) State taxes in Pennsylvania, Michigan and Illinois made up a simple majority (greater than 50%) of the tax effect in this category.
(2) Non-deductible IPR&D charges in 2025 of $45.7 million primarily related to the impact of a $221.0 million one-time, non-tax deductible charge for the acquisition of Inozyme Pharma, Inc. (Inozyme).
(3) Changes in unrecognized tax benefits for all jurisdictions are aggregated within this category.
The following is a reconciliation of the statutory federal income tax expense to the Company’s effective tax rate for the years ended December 31, 2024 and 2023:
| Years Ended December 31, | ||||||||||||||
| 2024 | 2023 | |||||||||||||
| Federal statutory income tax rate | $ | 113,770 | $ | 39,598 | ||||||||||
| State and local taxes | 4,756 | (3,614) | ||||||||||||
| Orphan Drug & General Business Credit | (35,486) | (39,535) | ||||||||||||
| Stock compensation expense | 7,467 | 2,209 | ||||||||||||
| Foreign Source Income Subject to US Tax | 44,492 | 47,721 | ||||||||||||
Foreign tax rate differential (1) | (34,905) | (69,987) | ||||||||||||
| Section 162(m) limitation | 9,278 | 9,699 | ||||||||||||
| Tax Reserves | 32,560 | 27,296 | ||||||||||||
| Intra-entity transfer of assets | (33,432) | 5,019 | ||||||||||||
| Valuation allowance/deferred benefit | 7,175 | 3,723 | ||||||||||||
| Other | (771) | (1,211) | ||||||||||||
| Effective income tax rate | $ | 114,904 | $ | 20,918 | ||||||||||
(1)For the year ended December 31, 2024, the foreign rate differential included foreign local tax expense which was at an effective rate lower than the U.S. statutory rate offset by elimination of intercompany sales. For the year ended December 31, 2023, the foreign rate differential included foreign local tax expense which was at an effective rate lower than the U.S. statutory rate.
Cash paid for income taxes, net of refunds received, by jurisdiction for the year ended December 31, 2025, was as follows.
Year Ended December 31, 2025 | |||||
Federal | $ | 33,000 | |||
State | 8,719 | ||||
Foreign | |||||
Ireland | 45,807 | ||||
United Kingdom | 5,027 | ||||
Other | 3,652 | ||||
Total cash paid for income taxes | $ | 96,205 | |||
The significant components of the Company’s net deferred tax assets were as follows:
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Net deferred tax assets: | |||||||||||
| Net operating loss carryforwards | $ | 105,642 | $ | 18,585 | |||||||
Tax credit carryforwards | 398,769 | 462,925 | |||||||||
| Accrued expenses, reserves, and prepaids | 148,124 | 119,986 | |||||||||
| Intangible assets | 625,084 | 696,096 | |||||||||
Capitalized R&D expenses | 367,200 | 310,081 | |||||||||
| Stock-based compensation | 35,848 | 42,609 | |||||||||
| Lease liabilities | 6,054 | 7,209 | |||||||||
| Inventory | 37,158 | 19,119 | |||||||||
| Other | (219) | 1,168 | |||||||||
| Valuation allowance | (181,743) | (126,311) | |||||||||
| Total deferred tax assets | 1,541,917 | 1,551,467 | |||||||||
| Joint venture basis difference | (989) | (1,037) | |||||||||
| Acquired intangibles | (803) | (915) | |||||||||
| ROU Assets | (3,911) | (4,684) | |||||||||
| Property, plant and equipment | (27,573) | (55,923) | |||||||||
| Total deferred tax liabilities | (33,276) | (62,559) | |||||||||
| Net deferred tax assets | $ | 1,508,641 | $ | 1,488,908 | |||||||
The increase in net deferred tax assets is primarily related to additional net operating loss carryforwards from Inozyme acquisition, capitalization of R&D expenses, impairment charges related to the divestiture of ROCTAVIAN, partially offset by valuation allowance related to acquired Inozyme net operating loss carryforwards, utilization of current year R&D credits and intangible asset amortization.
Valuation allowances are provided to reduce the amounts of the Company's deferred tax assets to an amount that is more likely than not to be realized based on an assessment of positive and negative evidence, including estimates of future taxable income necessary to realize future deductible amounts. At the end of each period, the Company will reassess the ability to realize its deferred tax benefits. If it is more likely than not that the Company would not realize the deferred tax benefits, a valuation allowance may need to be established against all or a portion of the deferred tax assets, which will result in a charge to tax expense.
In the third quarter of 2025, the Company determined that it is more likely than not that part of the deferred tax assets acquired in the Inozyme acquisition related to net operating losses and R&D credits will not be realized due to Section 382 limitations and state Separate Return Limitation Year (SRLY) rules and, therefore, a valuation allowance was recorded as part of the acquisition purchase accounting. In the third quarter of 2023, the Company determined that it is more likely than not that the deferred tax assets related to a future royalty stream will be realized. In making this determination, the Company analyzed both the consistent historical royalty earnings and the forecast of future royalty earnings and reached the conclusion that it was appropriate to release the valuation allowance reserve. The release is offset by an increase due to the Company’s expectation that state R&D credits generated will not be utilized.
As of December 31, 2025, the Company had the following net operating loss and tax credit carryforwards, which if not utilized, will expire as follows:
| Type | Amount | Year | ||||||||||||
| Federal net operating loss carryforwards | $ | 336,545 | Indefinite | |||||||||||
| Federal net operating loss carryforwards | $ | 2,632 | 2030-2033 | |||||||||||
| Federal R&D and orphan drug credit carryforwards | $ | 441,294 | 2028-2045 | |||||||||||
| State net operating loss carryforwards | $ | 466,453 | 2025-2045 | |||||||||||
| Dutch net operating loss carryforwards | $ | 26,927 | Indefinite | |||||||||||
Not included in the table above are $191.3 million of state research credit carryovers that will carry forward indefinitely.
The Company’s net operating losses and credits could be subject to annual limitations due to ownership change limitations provided by Internal Revenue Code Section 382 and similar state provisions. An annual limitation could result in the expiration of net operating losses and tax credit carryforward before utilization. There are limitations on the tax attributes of acquired entities however, the Company does not believe the limitations will have a material impact on the utilization of the net operating losses or tax credits.
The financial statement recognition of the benefit for a tax position is dependent upon the benefit being more likely than not to be sustainable upon audit by the applicable taxing authority. If this threshold is met, the tax benefit is then measured and recognized at the largest amount that is greater than 50% likely of being realized upon ultimate settlement.
A reconciliation of the beginning and ending amount of unrecognized tax benefits for the years ended December 31, 2025 and 2024, is as follows:
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Balance at beginning of period | $ | 325,035 | $ | 277,456 | |||||||
| Additions based on tax positions related to the current year | 48,843 | 47,682 | |||||||||
Additions (reductions) for tax positions of prior years | (2,206) | (103) | |||||||||
| Acquired Tax Positions | 9,214 | — | |||||||||
| Balance at end of period | $ | 380,886 | $ | 325,035 | |||||||
Included in the balance of unrecognized tax benefits as of December 31, 2025 were potential benefits of $366.8 million that, if recognized, would affect the effective tax rate. The Company’s policy for classifying interest and penalties associated with unrecognized income tax benefits is to include such items in the income tax expense. The total amount of accrued interest and penalties was not significant as of December 31, 2025. The Company believes it will not have any material decreases in its previously unrecognized tax benefits within the next twelve months.
The Company files income tax returns in the U.S., Ireland and various foreign jurisdictions. The U.S. and foreign jurisdictions have statute of limitations ranging from to five years. However, carryforward tax attributes that were generated in 2022 and earlier may still be adjusted upon examination by tax authorities. The Company's 2022 federal income tax return is currently under audit by the IRS.
The Company has not provided U.S. federal and applicable foreign withholding income taxes on the undistributed earnings of certain foreign subsidiaries as such earnings are intended to be indefinitely reinvested outside the U.S. The Company is unable to reasonably estimate the amount of the unrecognized deferred tax liability associated with these undistributed earnings.
During the year ended December 31, 2025, the Company received distributions from its Irish Subsidiary’s previously taxed earnings and profits (PTEP). These distributions did not result in U.S. federal income taxes or Irish withholding taxes. Any related state income tax impact was estimated to be immaterial for the year ended December 31, 2025. Going forward, the Company intends to repatriate the Irish Subsidiary’s earnings to the extent that such repatriations are not restricted by local rulings, and do not incur substantial incremental costs.
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 24, 2025 | |
| 2023 | Feb 26, 2024 | |
| 2022 | Feb 27, 2023 | |
| 2021 | Feb 25, 2022 | |
| 2020 | Feb 26, 2021 | |
| 2019 | Feb 27, 2020 | |
| 2018 | Feb 28, 2019 | |
| 2017 | Feb 26, 2018 | |
| 2016 | Feb 27, 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.