CRH PUBLIC LTD COCRH
CRH PUBLIC LTD CO Income Taxes Disclosure
14. Income taxes
The summary of the Income before income tax expense for the years ended December 31 was:
| in $ millions | 2025 | 2024 | 2023 | ||||||||
| Income | |||||||||||
| U.S. | 2,761 | 3,069 | 2,729 | ||||||||
| Non-U.S. | 2,044 | 1,645 | 1,285 | ||||||||
| Total income | 4,805 | 4,714 | 4,014 | ||||||||
The summary of the Income tax expense for the years ended December 31 was:
| in $ millions | 2025 | 2024 | 2023 | ||||||||
| Current tax: | |||||||||||
| U.S. - Federal | 383 | 466 | 632 | ||||||||
| U.S. - State | 71 | 84 | 67 | ||||||||
| Non-U.S. | 420 | 355 | 290 | ||||||||
| Total current tax expense | 874 | 905 | 989 | ||||||||
| Deferred tax: | |||||||||||
| U.S. - Federal | 230 | 187 | (28) | ||||||||
| U.S. - State | 25 | (5) | (12) | ||||||||
| Non-U.S. | (88) | (2) | (24) | ||||||||
| Total deferred tax expense (benefit) | 167 | 180 | (64) | ||||||||
| Total income tax expense | 1,041 | 1,085 | 925 | ||||||||
Due to the percentage of global operations subject to tax in the United States, the Company uses the U.S. Federal statutory tax rate in the reconciliation of the effective income tax rate. The reconciliation of the applicable U.S. Federal income tax rate to the effective income tax rate was:
| 2025 | 2024 | 2023 | ||||||||||||||||||
| $m | % | $m | % | $m | % | |||||||||||||||
| U.S. Federal Statutory Tax rate | 1,009 | 21.0 | % | 990 | 21.0 | % | 843 | 21 | % | |||||||||||
| State and Local Income Taxes, Net of Federal Income Tax Effect (i) | 71 | 1.5 | % | 47 | 1.0 | % | 38 | 1.0 | % | |||||||||||
| Effects of changes in tax laws or rates enacted in current period | 3 | 0.1 | % | – | – | % | – | – | % | |||||||||||
| Effect of Cross-Border Tax Laws | – | – | % | – | – | % | – | – | % | |||||||||||
| Foreign Tax Effects: | ||||||||||||||||||||
| Ireland | ||||||||||||||||||||
| Foreign tax rate differential | (62) | (1.3) | % | (30) | (0.6) | % | (26) | (0.7) | % | |||||||||||
| Nondeductible items | 50 | 1.0 | % | 67 | 1.4 | % | 48 | 1.2 | % | |||||||||||
| Other | 13 | 0.3 | % | (9) | (0.2) | % | (10) | (0.3) | % | |||||||||||
| Malta | ||||||||||||||||||||
| Tax credits | (234) | (4.9) | % | (281) | (6.0) | % | (259) | (6.5) | % | |||||||||||
| Changes in valuation allowances | 149 | 3.1 | % | 174 | 3.7 | % | 166 | 4.1 | % | |||||||||||
| Other | 41 | 0.9 | % | 52 | 1.1 | % | 39 | 1.0 | % | |||||||||||
| Philippines | ||||||||||||||||||||
| Nondeductible impairment of goodwill | – | – | % | – | – | % | 74 | 1.8 | % | |||||||||||
| Other | 12 | 0.3 | % | 5 | 0.1 | % | (8) | (0.2) | % | |||||||||||
| Poland | 2 | – | % | 21 | 0.5 | % | 3 | 0.1 | % | |||||||||||
| Other foreign jurisdictions | (27) | (0.6) | % | (12) | (0.3) | % | (11) | (0.3) | % | |||||||||||
| Tax Credits | (12) | (0.3) | % | (15) | (0.3) | % | (19) | (0.5) | % | |||||||||||
| Changes in Valuation Allowances | – | – | % | – | – | % | – | – | % | |||||||||||
| Non-taxable or Nondeductible items | (13) | (0.3) | % | 16 | 0.3 | % | (40) | (1.0) | % | |||||||||||
| Changes in Unrecognized Tax Benefits | 39 | 0.8 | % | 60 | 1.3 | % | 87 | 2.2 | % | |||||||||||
| Effective income tax rate | 1,041 | 22 | % | 1,085 | 23 | % | 925 | 23 | % | |||||||||||
(i) State taxes in Florida, Michigan, Texas, New Jersey, California, Connecticut, Utah and Oregon made up the majority (greater than 50%) of the tax effect in this category.
The significant components of the deferred tax assets and liabilities as of December 31 were:
| in $ millions | 2025 | 2024 | ||||||
| Deferred tax assets: | ||||||||
| Company retirement benefit plans | – | 2 | ||||||
| Revaluation of derivative financial instruments to fair value | 5 | 4 | ||||||
| Tax losses, credits and interest deduction carryforwards | 1,507 | 1,149 | ||||||
| Share-based compensation | 40 | 39 | ||||||
| Accrued expenses | 345 | 454 | ||||||
| Lease liabilities | 423 | 286 | ||||||
| Other | 8 | – | ||||||
| Total deferred tax assets | 2,328 | 1,934 | ||||||
| Less: valuation allowances | (1,336) | (1,059) | ||||||
| Total deferred tax assets after valuation allowances | 992 | 875 | ||||||
| Deferred tax liabilities: | ||||||||
| Company retirement benefit plans | 22 | – | ||||||
| Investment in subsidiaries | 162 | 146 | ||||||
| Depreciation, depletion and amortization | 3,772 | 3,419 | ||||||
| Leased right-of-use assets | 401 | 278 | ||||||
| Rolled-over capital gains | 26 | 21 | ||||||
| Other | – | 15 | ||||||
| Total deferred tax liabilities | 4,383 | 3,879 | ||||||
| Total net deferred tax liabilities | 3,391 | 3,004 | ||||||
The net deferred tax assets and liabilities that are included in the Consolidated Balance Sheets as of December 31 were:
| in $ millions | 2025 | 2024 | ||||||
| Deferred income taxes, noncurrent assets | (120) | (101) | ||||||
| Deferred income taxes, noncurrent liabilities | 3,511 | 3,105 | ||||||
| Total net deferred tax liabilities | 3,391 | 3,004 | ||||||
As of December 31, 2025, the Company had gross loss carryforwards of $1,485 million related to foreign operations and $57 million of federal gross loss carryforwards and $42 million of state net operating loss carryforwards. $893 million of certain foreign, federal and state loss carryforwards have various expiration dates ranging from 2026 to 2050; $690 million do not expire based on current tax legislation. The Company had gross interest deduction carryforwards of $3,188 million related to foreign operations and $188 million of federal gross interest deduction carryforwards. $88 million of certain interest carryforwards have various expiration dates ranging from 2026 to 2045, $3,287 million do not expire based on current tax legislation.
The summary of the change in valuation allowance as of December 31 was:
| in $ millions | 2025 | 2024 | 2023 | ||||||||
| Balance as of January 1 | 1,059 | 914 | 737 | ||||||||
| Acquisitions | (6) | 12 | – | ||||||||
| Provision for income taxes | 162 | 188 | 151 | ||||||||
| Foreign currency and other | 121 | (55) | 26 | ||||||||
| Balance as of December 31 | 1,336 | 1,059 | 914 | ||||||||
The Company maintains a valuation allowance on net operating losses and other deferred tax assets if, based on the weight of available evidence, it is more likely than not that some portion, or all, of a deferred tax asset will not be realized. As of December 31, 2025, and December 31, 2024, the Company has a valuation allowance on net deferred tax assets of $1,336 million and $1,059 million, respectively. For the year ended December 31, 2025, the valuation allowance increased due to an increase in interest deduction carryforwards.
A deferred tax liability has been recognized in respect of any undistributed earnings in which the Company is not permanently reinvested. The Company has $17.8 billion of undistributed earnings that are considered permanently reinvested as of December 31, 2025, for which no deferred tax liabilities have been recognized. It is not practicable to estimate the amount of tax that would be paid if there was a distribution of these earnings. Participation exemptions and tax credits are available in the majority of jurisdictions in which the Company operates.
The reconciliation of the changes in the unrecognized tax benefits as of December 31 was:
| in $ millions | 2025 | 2024 | 2023 | ||||||||
| Balance as of January 1 | 634 | 665 | 576 | ||||||||
| Increases related to prior periods | 9 | – | 9 | ||||||||
| Decreases related to prior periods | (54) | (50) | (12) | ||||||||
| Increases related to current period | 179 | 99 | 148 | ||||||||
| Decreases related to settlements with taxing authorities and lapse of statute of limitations | (66) | (65) | (68) | ||||||||
| Foreign currency and other | 37 | (15) | 12 | ||||||||
| Balance as of December 31 | 739 | 634 | 665 | ||||||||
The Company files income tax returns in Ireland, the United States, the United Kingdom, Germany, Canada, and other various foreign jurisdictions and is subject to ongoing examination by tax authorities throughout the world. In general, the Company is no longer subject to significant income tax examinations by tax authorities in the jurisdictions noted for years before 2017. The Company believes that its income tax reserves are adequately maintained taking into consideration both the technical merits of its tax return positions and ongoing developments in its income tax audits. However, the final determination of the Company's tax return positions, if audited, is uncertain and therefore there is a possibility that the outcomes of such events could cause the Company’s estimate to change in the future. No single position is expected to generate a significant increase or decrease to the liability for unrecognized tax benefits within 12 months of the reporting date. As of December 31, 2025, and December 31, 2024, the unrecognized tax benefits that, if recognized, would impact the effective tax rate were $727 million and $589 million, respectively.
The Company’s policy is to accrue interest and penalties related to potential underpayment of income taxes within the provision for income taxes. As of December 31, 2025, and December 31, 2024, the Company had accrued interest of $101 million and $101 million, respectively. As of December 31, 2025, December 31, 2024, and December 31, 2023, the interest and penalties included in Income tax expense was $8 million, $20 million, and $14 million, respectively.
Income tax paid net of (refunds) received, consisted of the following:
| in $ millions | 2025 | 2024 | 2023 | |||||||||||
| Federal | 366 | 553 | 539 | |||||||||||
| State | 95 | 100 | 121 | |||||||||||
| Ireland | 104 | 90 | 88 | |||||||||||
| Poland | 70 | 42 | 35 | |||||||||||
| Canada | 33 | 79 | 4 | |||||||||||
| Other jurisdictions | 163 | 96 | 172 | |||||||||||
| Total taxes paid | 831 | 960 | 959 | |||||||||||
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.