C. H. ROBINSON WORLDWIDE, INC.CHRW
C. H. ROBINSON WORLDWIDE, INC. Income Taxes Disclosure
INCOME TAXES
C.H. Robinson Worldwide, Inc., and its 80 percent (or more) owned U.S. subsidiaries file a consolidated federal income tax return. We file unitary or separate state returns based on state filing requirements. With few exceptions, we are no longer subject to audits of U.S. federal, state and local, or non-U.S. income tax returns before 2021.
The Company is no longer indefinitely reinvested with respect to the unremitted earnings of any foreign subsidiaries. However, the Company continues to assert indefinite reinvestment with respect to certain other outside‑basis temporary differences related to those subsidiaries. It is not practicable for the Company to estimate the amount of unrecognized deferred tax liability associated with other outside-basis temporary differences.
In 2021, the Organization for Economic Cooperation and Development (“OECD”) announced an Inclusive Framework on Base Erosion and Profit Shifting including Pillar Two Model Rules defining the global minimum tax, which calls for the taxation of large multinational corporations at a minimum rate of 15 percent. Subsequently, multiple sets of administrative guidance have been issued. Many non-U.S. tax jurisdictions have either recently enacted legislation to adopt certain components of the Pillar Two Model Rules beginning in 2024 (including the European Union Member States) with the adoption of additional components in later years or announced their plans to enact legislation in future years. We are subject to these rules in certain jurisdictions in which we operate, and any expected tax impacts have been included in our results.
Recent OECD administrative guidance introduced a new “Side‑by‑Side” framework under Pillar Two, including a Side‑by‑Side Safe Harbor that can significantly reduce or eliminate top‑up taxes for multinational groups headquartered in eligible jurisdictions. The guidance that was released in early January 2026 adds clarity around the application of the global minimum tax rules, including new safe harbors and simplified compliance measures intended to ease the Pillar Two reporting and calculation burden for affected companies. The Company is currently reviewing this new guidance to evaluate potential implications for our global tax profile, operational structures, and reporting obligations beginning in 2026. The rules implemented for the tax year 2025 did not result in additional tax for the Company.
Income before provision for income taxes consisted of (in thousands):
| Twelve Months Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Domestic | $ | 525,436 | $ | 336,328 | $ | 287,524 | |||||||||||
| Foreign | 197,021 | 242,876 | 121,662 | ||||||||||||||
| Total | $ | 722,457 | $ | 579,204 | $ | 409,186 | |||||||||||
A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding interest and penalties, is as follows (in thousands):
| As of December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Unrecognized tax benefits, beginning of period | $ | 19,750 | $ | 16,916 | $ | 39,056 | |||||||||||
| Additions based on tax positions related to the current year | 4,984 | 2,747 | 2,111 | ||||||||||||||
| Additions for tax positions of prior years | 19,193 | 2,168 | 1,268 | ||||||||||||||
| Reductions for tax positions of prior years | (315) | (582) | (91) | ||||||||||||||
| Lapse in statute of limitations | (1,005) | (1,182) | (2,346) | ||||||||||||||
| Settlements | (13,031) | (317) | (23,082) | ||||||||||||||
| Unrecognized tax benefits, end of the period | $ | 29,576 | $ | 19,750 | $ | 16,916 | |||||||||||
Income tax expense considers amounts that may be needed to cover exposures for open tax years. We do not expect any material impact related to open tax years; however, actual settlements may differ from amounts accrued.
As of December 31, 2025, December 31, 2024, and December 31, 2023, we had unrecognized tax benefits and related interest and penalties of $34.9 million, $23.5 million, and $20.1 million, respectively, all of which would affect our effective tax rate if recognized. In the unlikely event these unrecognized tax benefits and related interest and penalties were recognized fully in 2025, the impact to the annual effective tax rate would have been 4.8 percent.
We recognize interest and penalties related to uncertain tax positions in the provision for income taxes. During the years ended December 31, 2025, 2024, and 2023, we recognized approximately $0.9 million, $0.7 million, and $0.7 million in interest and penalties, respectively. We had approximately $5.3 million and $3.7 million for the payment of interest and penalties related to
uncertain tax positions accrued within noncurrent income taxes payable as of December 31, 2025 and 2024, respectively. These amounts are not included in the reconciliation above.
The components of the provision for income taxes consist of the following (in thousands):
| Twelve Months Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Tax provision: | |||||||||||||||||
| Federal | $ | 79,297 | $ | 135,807 | $ | 55,149 | |||||||||||
| State | 6,494 | 23,081 | 4,014 | ||||||||||||||
| Foreign | 41,588 | 32,885 | 62,426 | ||||||||||||||
| 127,379 | 191,773 | 121,589 | |||||||||||||||
| Deferred provision (benefit): | |||||||||||||||||
| Federal | 7,553 | (83,702) | (32,820) | ||||||||||||||
| State | 4,745 | (10,379) | 6,223 | ||||||||||||||
| Foreign | (4,301) | 15,822 | (10,935) | ||||||||||||||
| 7,997 | (78,259) | (37,532) | |||||||||||||||
| Total provision | $ | 135,376 | $ | 113,514 | $ | 84,057 | |||||||||||
A reconciliation of the provision for income taxes using the statutory federal income tax rate to our effective income tax rate after the adoption of ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosure, is as follows (dollars in thousands):
| Year Ended December 31, 2025 | |||||||||||
| $ | % | ||||||||||
| U.S. federal statutory rate | $ | 151,716 | 21.0 | % | |||||||
State and local income taxes, net of federal income tax effect(1) | 4,531 | 0.6 | |||||||||
| Foreign tax effects | 2,186 | 0.3 | |||||||||
| Effect of cross-border tax laws (net of foreign tax credits) | |||||||||||
| Subpart F income | (12,038) | (1.7) | |||||||||
| Global intangible low-taxed income | 7,217 | 1.0 | |||||||||
| Other | (3,251) | (0.5) | |||||||||
| Tax credits | (2,964) | (0.4) | |||||||||
| Changes in valuation allowances | (6,274) | (0.9) | |||||||||
| Nontaxable or nondeductible items | |||||||||||
| Share-based payment awards | (31,818) | (4.4) | |||||||||
| Section 162(m) limitations on compensation | 14,034 | 1.9 | |||||||||
| Other | 2,576 | 0.4 | |||||||||
| Changes in unrecognized tax benefits | 7,664 | 1.1 | |||||||||
| Other adjustments | 1,797 | 0.3 | |||||||||
| Effective income tax rate | $ | 135,376 | 18.7 | % | |||||||
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(1) State taxes in Illinois, New Jersey, and Texas make up the majority (greater than 50 percent) of the tax effect in this category.
A reconciliation of the provision for income taxes using the statutory federal income tax rate to our effective income tax rate prior to the adoption of ASU 2023-09 is as follows:
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| Twelve Months Ended December 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| Federal statutory rate | 21.0 | % | 21.0 | % | |||||||
| State income taxes, net of federal benefit | 1.9 | 2.1 | |||||||||
| Section 199 deduction | — | 4.7 | |||||||||
| Share-based payment awards | (1.8) | (2.7) | |||||||||
| Foreign tax credits | 2.5 | (9.5) | |||||||||
| Other U.S. tax credits and incentives | (5.3) | (3.4) | |||||||||
| Foreign tax rate differential | (0.4) | 5.8 | |||||||||
| Remeasurement of deferred tax balances | (1.1) | — | |||||||||
Business divestitures(1) | 1.3 | 0.9 | |||||||||
| Section 162(m) limitations on compensation | 1.3 | 1.2 | |||||||||
| Other | 0.2 | 0.4 | |||||||||
| Effective income tax rate | 19.6 | % | 20.5 | % | |||||||
(1) Amounts in 2024 relate to the divestiture of our Europe Surface Transportation business. Amounts in 2023 relate to the divestiture of our Argentina operations. Refer to Note 15, Divestitures, for further discussion related to these divestitures.
Income taxes paid (net of refunds received) are presented below (in thousands). Jurisdictions where income taxes paid exceeded five percent of total income taxes paid (net of refunds received) are disclosed separately.
| Twelve Months Ended December 31, 2025 | |||||
| Federal | $ | 63,714 | |||
| State and local | 13,133 | ||||
| Foreign | |||||
| China | 7,359 | ||||
| Ireland | (7,857) | ||||
| Other | 18,698 | ||||
| Total income taxes paid (net of refunds received) | $ | 95,047 | |||
Cash income taxes paid (net of refunds received) were $131.8 million and $155.9 million for the twelve months ended December 31, 2024 and December 31, 2023, respectively.
Deferred tax assets (liabilities) are comprised of the following (in thousands):
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| As of December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Deferred tax assets: | |||||||||||
| Lease liabilities | $ | 57,430 | $ | 72,532 | |||||||
| Compensation | 45,359 | 64,202 | |||||||||
| Accrued expenses | 36,432 | 42,718 | |||||||||
| Foreign affiliate prepayment | 57,121 | 49,409 | |||||||||
Foreign net operating loss carryforwards | 59,096 | 69,555 | |||||||||
| Long-lived assets | 117,473 | 109,308 | |||||||||
Other | 22,484 | 32,855 | |||||||||
Total deferred tax assets (before valuation allowance) | 395,395 | 440,579 | |||||||||
Less: valuation allowance | (48,802) | (64,198) | |||||||||
| Total deferred tax assets | 346,593 | 376,381 | |||||||||
| Deferred tax liabilities: | |||||||||||
| Right-of-use assets | (50,063) | (64,686) | |||||||||
| Prepaid assets | (7,053) | (4,928) | |||||||||
| Foreign withholding tax | (8,803) | (10,645) | |||||||||
Other(1) | (8,745) | (7,778) | |||||||||
| Total deferred tax liabilities | (74,664) | (88,037) | |||||||||
| Net deferred tax assets | $ | 271,929 | $ | 288,344 | |||||||
(1)The amounts as of December 31, 2024, have been adjusted to conform to current year presentation.
We had foreign net operating loss carryforwards with a tax effect of $59.1 million as of December 31, 2025, and $69.6 million as of December 31, 2024. The net operating loss carryforwards will expire at various dates through 2042, with certain jurisdictions having indefinite carryforward terms. We continually monitor and review the foreign net operating loss carryforwards to determine the ability to realize the deferred tax assets associated with the foreign net operating loss carryforwards. As of December 31, 2025 and December 31, 2024, we have recorded a valuation allowance of $48.8 million and $64.2 million, respectively, against the deferred tax asset related to the foreign operating loss carryforwards that are primarily in Luxembourg.
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 13, 2026 | Showing above |
| 2024 | Feb 14, 2025 | |
| 2023 | Feb 16, 2024 | |
| 2022 | Feb 17, 2023 | |
| 2021 | Feb 23, 2022 | |
| 2020 | Feb 19, 2021 | |
| 2019 | Feb 19, 2020 | |
| 2018 | Feb 25, 2019 | |
| 2017 | Feb 28, 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.