Coupang, Inc.CPNG
Coupang, Inc. Income Taxes Disclosure
Income Taxes
We are subject to income taxation through certain of our subsidiaries primarily in the United States, Korea, Taiwan, United Kingdom, and other foreign jurisdictions in which we do business.
The components of income before income taxes are as follows:
(in millions) | 2025 | 2024 | 2023 | ||||||||||||||
| United States | $ | (408) | $ | (1,073) | $ | (217) | |||||||||||
| Foreign | 1,005 | 1,546 | 801 | ||||||||||||||
| Income before income taxes | $ | 597 | $ | 473 | $ | 584 | |||||||||||
The components of income tax expense (benefit) were as follows:
(in millions) | 2025 | 2024 | 2023 | ||||||||||||||
Current taxes | |||||||||||||||||
| U.S federal | $ | (35) | $ | 76 | $ | 62 | |||||||||||
| U.S. state and local | — | — | — | ||||||||||||||
| Foreign | 381 | 106 | 46 | ||||||||||||||
| Current taxes | 346 | 182 | 108 | ||||||||||||||
Deferred taxes | |||||||||||||||||
| U.S. federal | (48) | (15) | 21 | ||||||||||||||
| U.S. state and local | — | — | — | ||||||||||||||
| Foreign | 85 | 240 | (905) | ||||||||||||||
| Deferred taxes | 37 | 225 | (884) | ||||||||||||||
| Income tax expense (benefit) | $ | 383 | $ | 407 | $ | (776) | |||||||||||
Differences between the provision at the federal statutory rate and the provision recorded at the consolidated level for 2025 are as follows:
(in millions, except percentages) | 2025 | ||||||||||
| U.S. federal statutory tax rate | $ | 125 | 21.0 | % | |||||||
| State and local income taxes, net of federal income tax effect | — | — | % | ||||||||
| Foreign tax effects | |||||||||||
| Korea | |||||||||||
| Statutory tax rate difference between countries | 46 | 7.7 | % | ||||||||
| Local income tax | 41 | 6.9 | % | ||||||||
| Effect of changes in tax laws or rates | (34) | (5.7) | % | ||||||||
| Tax credits | (8) | (1.3) | % | ||||||||
| Other | 7 | 1.2 | % | ||||||||
| Other foreign jurisdictions | 182 | 30.5 | % | ||||||||
| Effect of cross-border tax laws | |||||||||||
| Branch loss | (33) | (5.5) | % | ||||||||
| Foreign currency loss | (14) | (2.3) | % | ||||||||
| Tax credits | (38) | (6.4) | % | ||||||||
| Changes in valuation allowance | 8 | 1.3 | % | ||||||||
| Nontaxable and nondeductible items | |||||||||||
| Stock compensation | 49 | 8.2 | % | ||||||||
| Other | 26 | 4.4 | % | ||||||||
| Changes in unrecognized tax benefits | 33 | 5.5 | % | ||||||||
| Other adjustments | (7) | (1.2) | % | ||||||||
| Income tax expense | $ | 383 | 64.2 | % | |||||||
Differences between the provision at the federal statutory rate and the provision recorded at the consolidated level for 2024 and 2023 were as follows:
(in millions) | 2024 | 2023 | |||||||||
| Taxes computed at the federal statutory rate | $ | 99 | $ | 122 | |||||||
| Differences resulting from: | |||||||||||
| Statutory rate difference | 32 | 28 | |||||||||
| Change in valuation allowances | 193 | (1,031) | |||||||||
| U.S. taxes on foreign earnings | 153 | 108 | |||||||||
| Stock compensation | 56 | 44 | |||||||||
| Tax credit | (133) | (47) | |||||||||
| Other nondeductible expense | 17 | — | |||||||||
| Other | (10) | — | |||||||||
| Income tax expense (benefit) | $ | 407 | $ | (776) | |||||||
Our resulting effective tax rate differs from the applicable statutory rate, primarily due to tax credits, U.S. taxes on foreign earnings such as the inclusion of GILTI provisions, the valuation allowance against deferred tax assets in loss making jurisdictions, and other permanent differences.
In December 2025, due to a change in the Korean tax law, the enacted statutory tax rates increased 1% for all taxable income brackets effective January 1, 2026. Under U.S. GAAP, we are required to recognize the effect of a change in tax law in the period of enactment. As a result, we recorded a one-time immaterial tax benefit in the fourth quarter of 2025 due to the revaluation of the Korean net deferred tax assets.
In July 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA introduces a broad range of tax reform provisions, including the allowance of immediate deduction of qualified domestic research and development expenses, modifications to the international tax framework, and changes to certain business-related exclusions, deductions, and credits. Certain provisions are effective starting in 2025 and the impacts of the OBBBA are reflected in our results for 2025, resulting in an immaterial decrease in our tax provision.
The income tax effects of temporary differences that give rise to significant portions of the deferred income tax assets and deferred income tax liabilities were as follows:
(in millions) | December 31, 2025 | December 31, 2024 | |||||||||
| Deferred tax assets | |||||||||||
| Provision and allowances | $ | 114 | $ | 89 | |||||||
| Stock compensation | 27 | 22 | |||||||||
| Depreciation | 15 | 13 | |||||||||
| Accrued expenses | 117 | 104 | |||||||||
| Amortization | 22 | 22 | |||||||||
| Defined severance benefits | 166 | 118 | |||||||||
| Lease liabilities | 761 | 500 | |||||||||
| Net operating loss carryforwards | 1,152 | 989 | |||||||||
| Tax credits | 84 | 89 | |||||||||
| Other | 115 | 48 | |||||||||
| Total deferred tax assets | 2,573 | 1,994 | |||||||||
| Less: valuation allowances | (1,271) | (903) | |||||||||
| Total deferred tax assets net of valuation allowance | $ | 1,302 | $ | 1,091 | |||||||
| Deferred tax liabilities | |||||||||||
| Lease asset | (704) | (466) | |||||||||
| Other | (2) | (3) | |||||||||
| Total deferred tax liabilities | (706) | (469) | |||||||||
| Net deferred tax assets | $ | 596 | $ | 622 | |||||||
Changes in the valuation allowances were as follows:
(in millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Beginning balance, January 1 | $ | (903) | $ | (82) | $ | (1,085) | |||||||||||
| Changes to existing valuation allowances | (359) | (193) | 140 | ||||||||||||||
| Farfetch Acquisition | — | (633) | — | ||||||||||||||
| Derecognition of valuation allowances | — | — | 905 | ||||||||||||||
| Changes in foreign exchange rates, statutory rates and other | (9) | 5 | (42) | ||||||||||||||
| Ending balance, December 31 | $ | (1,271) | $ | (903) | $ | (82) | |||||||||||
In 2023, we released the valuation allowance primarily related to the Korea net operating loss deferred tax assets as the sustained profitability in Korea represented objective positive evidence for the realizability of certain deferred tax assets. The release of the valuation allowance in 2023 resulted in an increase to the carrying value of deferred tax assets on the balance sheet and a benefit to our provision for income taxes of $905 million. The valuation allowance at December 31, 2025 and 2024 was primarily related to our U.S. and foreign net operating loss carryforwards for Taiwan and Farfetch subsidiaries.
As of December 31, 2025, we had $4.7 billion of federal, state, and foreign net operating loss carryforwards available to reduce future corporate taxable income. Certain of these amounts are subject to annual limitations under applicable tax law. If not utilized, an immaterial amount of these losses will begin to expire in 2026 and $3.2 billion of these losses do not expire.
We have corporate tax credit carryforwards of $44 million in the United States which may be carried forward indefinitely to reduce future corporate regular income taxes, and $55 million of tax credit carryforwards in Korea which begin to expire in 2026.
Our tax returns in the U.S., Korea, and other foreign jurisdictions are routinely audited and settlements of issues raised in these audits sometimes affect our tax provisions. We are also subject to tax examinations for value added tax, sales-based, payroll, and other non-income taxes. We did not have any material uncertain tax positions as of December 31, 2025 and 2024.
The open tax years for our major tax jurisdictions are 2013 - 2025 for the United States and 2020 - 2025 for Korea.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 25, 2025 | |
| 2023 | Feb 28, 2024 | |
| 2022 | Mar 1, 2023 | |
| 2021 | Mar 3, 2022 | |
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.