CBRE GROUP, INC.CBRE
CBRE GROUP, INC. Income Taxes Disclosure
16. Income Taxes
Provision for Income Taxes
The components of income before provision for income taxes consisted of the following (dollars in millions):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Domestic | $ | 868 | $ | 326 | $ | 665 | |||||||||||
| Foreign | 726 | 892 | 612 | ||||||||||||||
| Total | $ | 1,594 | $ | 1,218 | $ | 1,277 | |||||||||||
Our tax provision (benefit) consisted of the following (dollars in millions):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Current provision: | |||||||||||||||||
| Federal | $ | 185 | $ | 48 | $ | 98 | |||||||||||
| State | 74 | 60 | 31 | ||||||||||||||
| Foreign | 327 | 268 | 242 | ||||||||||||||
| Total current provision | 586 | 376 | 371 | ||||||||||||||
| Deferred provision: | |||||||||||||||||
| Federal | (71) | (57) | (4) | ||||||||||||||
| State | (16) | (33) | 4 | ||||||||||||||
| Foreign | (182) | (104) | (121) | ||||||||||||||
| Total deferred provision | (269) | (194) | (121) | ||||||||||||||
| Total provision for income taxes | $ | 317 | $ | 182 | $ | 250 | |||||||||||
Effective Tax Rate
The following is a reconciliation of the difference between the U.S. statutory federal income tax rate and our effective tax rate (dollars in millions):
| Year Ended December 31, 2025 | |||||||||||
| Amount | Percent | ||||||||||
| U.S. Federal statutory tax rate | $ | 335 | 21 | % | |||||||
State and local income tax, net of federal (national) income tax effect (1) | 46 | 3 | % | ||||||||
| Foreign tax effects | |||||||||||
| Bermuda | |||||||||||
| Statutory rate difference between Bermuda and United States | (21) | (1) | % | ||||||||
| Tax Credits | (53) | (3) | % | ||||||||
| Other foreign jurisdictions | 54 | 3 | % | ||||||||
| Effect of cross-border tax laws | |||||||||||
| Foreign Tax Credits | (40) | (3) | % | ||||||||
| Tax credits | (7) | — | % | ||||||||
| Nontaxable or nondeductible items | 20 | 1 | % | ||||||||
| Changes in unrecognized tax benefits | (8) | (1) | % | ||||||||
| Other adjustments | (9) | (1) | % | ||||||||
| Effective Tax Rate | $ | 317 | 20 | % | |||||||
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(1)State and local income taxes in California, New York and New York City made up the majority (greater than 50 percent) of the domestic state and local income taxes, net of federal (national) effect category.
| Year Ended December 31, | ||||||||||||||
| 2024 | 2023 | |||||||||||||
| Federal statutory tax rate | 21 | % | 21 | % | ||||||||||
| Foreign rate differential | (1) | (1) | ||||||||||||
| State taxes, net of federal benefit | 2 | 2 | ||||||||||||
Nontaxable or nondeductible items | 1 | 3 | ||||||||||||
| Reserves for uncertain tax positions | (4) | — | ||||||||||||
Tax credits | (5) | (5) | ||||||||||||
| Other | 1 | (1) | ||||||||||||
| Effective tax rate | 15 | % | 19 | % | ||||||||||
Income Taxes Paid
The table below presents amounts of income taxes paid, net of refunds, by jurisdiction (dollars in millions):
| Year Ended December 31, 2025 | ||||||||
| U.S. Federal | $ | 210 | ||||||
| U.S. State and local | 66 | |||||||
Total U.S. | 276 | |||||||
| Foreign | ||||||||
India | 42 | |||||||
| United Kingdom | 76 | |||||||
| All other foreign jurisdictions | 205 | |||||||
Total Foreign | 323 | |||||||
| Total cash income taxes paid, net of refunds | $ | 599 | ||||||
Deferred Taxes
Cumulative tax effects of temporary differences are shown below (dollars in millions):
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Assets: | |||||||||||
| Tax losses and tax credits | $ | 959 | $ | 747 | |||||||
| Operating lease liabilities | 640 | 407 | |||||||||
| Bonus and deferred compensation | 404 | 372 | |||||||||
| Bad debt and other reserves | 191 | 130 | |||||||||
| All other | 182 | 139 | |||||||||
| Deferred tax assets, before valuation allowance | 2,376 | 1,795 | |||||||||
| Less: Valuation allowance | (442) | (396) | |||||||||
| Deferred tax assets | 1,934 | 1,399 | |||||||||
| Liabilities: | |||||||||||
| Property and equipment | (23) | (34) | |||||||||
| Unconsolidated affiliates and partnerships | (128) | (104) | |||||||||
| Capitalized costs and intangibles | (694) | (555) | |||||||||
| Operating lease assets | (574) | (351) | |||||||||
| All other | (57) | (64) | |||||||||
| Deferred tax liabilities | (1,476) | (1,108) | |||||||||
Net deferred tax assets | $ | 458 | $ | 291 | |||||||
As of December 31, 2025, there were deferred tax assets before valuation allowances of approximately $657 million related to U.S. federal, state, and foreign net operating losses (NOLs). The majority of the NOLs are carried forward indefinitely and primarily related to the foreign jurisdictions. In certain foreign jurisdictions, NOLs expire each year beginning in 2025. The utilization of NOLs may be subject to certain limitations under U.S. federal, state and foreign laws. As of December 31, 2025, we had an interest limitation carryforward of approximately $220 million in the U.S. and foreign
jurisdictions that can be carried forward indefinitely. As of December 31, 2025, we had U.S. federal and state capital losses carryforward, net of reserves for uncertain tax position, of approximately $58 million which will begin to expire after 2027, and approximately $26 million of foreign tax credits, which will expire after 2033. We have recorded a valuation allowance for deferred tax assets where we believe that it is more likely than not that the tax attributes will not be utilized.
We determined as of December 31, 2025, $442 million of deferred tax assets do not satisfy the realization criteria set forth in Topic 740. Accordingly, a valuation allowance has been recorded for this amount. If released, the entire amount would result in a benefit to continuing operations. During the year ended December 31, 2025, our valuation allowance increased by approximately $46 million, which was primarily attributed to foreign currency translation. We believe it is more likely than not that future operations will generate sufficient taxable income to realize the benefit of our deferred tax assets recorded as of December 31, 2025, net of valuation allowance.
At December 31, 2025, we have undistributed earnings of certain foreign subsidiaries of approximately $4.9 billion for which we have indefinitely reinvested and not recognized deferred taxes. As of December 31, 2025, we have recorded $34 million of deferred tax liability relating to book over tax basis in Turner & Townsend undistributed earnings and for any subsidiaries not considered indefinitely reinvested.
Uncertain Tax Positions
The total amount of gross unrecognized tax benefits was approximately $364 million and $347 million as of December 31, 2025 and 2024, respectively. The increase of $17 million resulted from an accrual of gross unrecognized tax benefits of $35 million, and a release of $18 million of gross unrecognized tax benefits due to the expiration of statute of limitations in various tax jurisdictions. The total amount of unrecognized tax benefits that would affect our effective tax rate, if recognized, is $233 million as of December 31, 2025.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (dollars in millions):
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Beginning balance, unrecognized tax benefits | $ | (347) | $ | (413) | |||||||
| Gross increases - tax positions in prior period | (7) | (9) | |||||||||
| Gross decreases - tax positions in prior period | — | 3 | |||||||||
| Gross increases - current-period tax positions | (28) | (21) | |||||||||
| Decreases relating to settlements | — | 80 | |||||||||
| Reductions as a result of lapse of statute of limitations | 18 | 11 | |||||||||
| Foreign exchange movement | — | 2 | |||||||||
| Ending balance, unrecognized tax benefits | $ | (364) | $ | (347) | |||||||
Our continuing practice is to recognize accrued interest and/or penalties related to income tax matters within income tax expense. During the years ended December 31, 2025 and 2024, we accrued an additional $8 million and $4 million, respectively, in interest and penalties associated with uncertain tax positions. As of December 31, 2025, we have recognized a liability for interest and penalties of $18 million.
We conduct business globally and file income tax returns in the U.S. federal jurisdiction and in multiple state, local, and foreign tax jurisdictions. We are under audit by various states and cities including California, New York, New York City, and Texas. We are also under audit by various foreign tax jurisdictions including France, Germany, and Spain. With limited exception, our significant U.S. state and foreign tax jurisdictions are no longer subject to audit by the various tax authorities for tax years prior to 2015 and 2018, respectively.
On July 4, 2025, the U.S. federal government enacted H.R.1, the One Big Beautiful Bill Act (OBBBA), a budget reconciliation package that changes the U.S. federal income tax laws, including extensions of various expiring provisions from the Tax Cuts and Jobs Act of 2017. The 2025 impacts of the OBBBA are insignificant based on our current operations.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 12, 2026 | Showing above |
| 2024 | Feb 14, 2025 | |
| 2023 | Feb 20, 2024 | |
| 2022 | Feb 27, 2023 | |
| 2021 | Mar 1, 2022 | |
| 2020 | Feb 24, 2021 | |
| 2019 | Mar 2, 2020 | |
| 2018 | Mar 1, 2019 | |
| 2017 | Mar 1, 2018 | |
| 2016 | Mar 1, 2017 | |
| 2015 | Feb 29, 2016 | |
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.