Chemours Co Income Taxes Disclosure

Note 9. Income Taxes

In 2023, the Company received a ruling from the Swiss tax authorities which resulted in the recognition of a deferred tax asset related to intangibles and an accompanying valuation allowance. The current year movement of this ruling continues to be presented net of the valuation allowance in the effective tax rate reconciliation above.

Prior to adoption of ASU 2023-09, the Company reported income taxes paid in 2024 and 2023 of $82 and $63, respectively.

Management asserts that it is indefinitely reinvested with respect to all undistributed earnings prior to 2018 and, therefore, has not recorded deferred tax liabilities with respect to those earnings. Beginning in 2018, management determined that the Company’s earnings from certain foreign subsidiaries are not indefinitely reinvested and presumed such earnings will be distributed to the U.S. At December 31, 2025 and 2024, deferred tax liabilities for the foreign subsidiaries that are not indefinitely reinvested were not material to the Company’s consolidated financial statements. At December 31, 2025, the amount of indefinitely reinvested unremitted earnings was approximately $474. The potential tax implications of the repatriation of unremitted earnings are driven by the facts at the time of distribution; however, the incremental cost to repatriate earnings is expected to be primarily related to withholding taxes and is not expected to be material.

The Company reviews its tax return positions, taking into account the progress of audits by various taxing jurisdictions and other changes in relevant facts and circumstances evident at each balance sheet date. At December 31, 2025, the Company recognized net tax expense of $6 related to uncertain tax positions specific to transfer pricing and the treatment of discrete intercompany transactions. The Company maintains its as filed tax positions are appropriate and supportable.

Under the tax laws of various jurisdictions in which the Company operates, deductions or credits that cannot be fully utilized for tax purposes during the current year may be carried forward or back, subject to statutory limitations, to reduce taxable income or taxes payable in future or prior years. At December 31, 2025, the Company’s state net operating losses amounted to $25, which substantially expire between 2035 and 2045. The Company has foreign net operating losses of $60, which have various expiration dates between 2029 through 2044, as well as unlimited carryforward periods, and $50 of certain foreign tax credits, which expire between 2033 and 2045.

Each year, Chemours and/or its subsidiaries file income tax returns in the U.S. federal jurisdiction and various states and non-U.S. jurisdictions. The following table sets forth the Company’s significant jurisdictions’ tax returns that are subject to examination by their respective taxing authorities for the open years listed.

Positions challenged by the taxing authorities may be settled or appealed by Chemours and/or EID in accordance with the tax matters agreement. As a result, income tax uncertainties are recognized in the Company’s consolidated financial statements in accordance with accounting for income taxes, when applicable.

As of December 31, 2025, the total amount of unrecognized tax benefits was $90, of which $58 was recorded in other liabilities and $32 was recorded as an offset to deferred tax assets. These unrecognized tax benefits primarily relate to transfer pricing matters and the treatment of discrete intercompany transactions. In addition, accruals of $16 have been recorded for penalties and interest, as of December 31, 2025, in other liabilities.

These liabilities at December 31, 2025 were reduced by $44 for offsetting benefits from the corresponding effects of potential transfer pricing adjustments included in other assets.

For the years ended December 31, 2025, 2024, and 2023 the Company recorded $176, $(30), and $168 of valuation allowance, respectively.

Valuation allowances require an assessment of both positive and negative evidence when determining whether it is more likely than not that deferred tax assets are recoverable. Such assessment is required on a jurisdiction-by-jurisdiction basis. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Based upon our analysis of historical operation results, as well as projections of our future taxable income/(losses) during the periods in which the temporary differences will be recoverable, management believes the uncertainty regarding the realization of certain U.S. federal, foreign, and state deferred tax assets requires a valuation allowance against such assets as of December 31, 2025.

For the year ended December 31, 2025, the Company recorded certain valuation allowance adjustments against deferred tax assets of its U.S. consolidated group, including a $156 valuation allowance for U.S. federal and state interest carryforwards, as well as $12 against its State net operating losses and other deferred tax assets. In addition, the Company recorded a $10 partial valuation allowance against its net operating losses generated by its Dutch subsidiaries. Finally, the Company determined its Argentinean required a full valuation allowance of $3 recorded in the fourth quarter.

For the year ended December 31, 2024, the decrease in valuation allowance of $30 was primarily related to changes in realizability associated with deferred tax assets of its Taiwanese and Swiss subsidiaries.

For the year ended December 31, 2023, the increase in valuation allowance of $168 was primarily due to the Company’s recognition of a $150 deferred tax asset and related valuation allowance of $138 in connection with a Swiss ruling received in 2023 related to intangible assets and certain limitations on its realizability. In addition, there was a plant closure in Taiwan whereby the Company recorded a valuation allowance of $13 against certain deferred tax assets of one of its Taiwanese subsidiaries. One of our U.S. subsidiaries also recorded a $15 valuation allowance against its deferred tax assets for U.S. State net operating losses and other deferred tax assets.

Our US federal, state, and foreign valuation allowances are based on projections of taxable income, which may be subject to change in the future, and may be impacted by the Tax Act provisions going into effect in 2026 regarding interest deductibility limitations, and events subsequent to our Balance Sheet date including the previously disclosed sale of land in Kuan Yin, Taiwan and any future costs incurred in connection with Note 22, Commitments and Contingent Liabilities.