Corteva, Inc.CTVA
Corteva, Inc. Income Taxes Disclosure
INCOME TAXES
Domestic and foreign components of income (loss) from continuing operations before income taxes and the provision for (benefit from) current and deferred tax expense (benefit) are shown below:
| Geographic Allocation of Income (Loss) and Provision for (Benefit from) Income Taxes | For the Year Ended December 31, | ||||||||||
| (In millions) | 2025 | 2024 | 2023 | ||||||||
| Income (loss) from continuing operations before income taxes | |||||||||||
| Domestic | $ | 325 | $ | 324 | $ | (414) | |||||
| Foreign | 1,363 | 951 | 1,507 | ||||||||
| Income (loss) from continuing operations before income taxes | $ | 1,688 | $ | 1,275 | $ | 1,093 | |||||
| Current tax expense (benefit) | |||||||||||
| Federal | $ | 87 | $ | 285 | $ | 143 | |||||
| State and local | 26 | 45 | 40 | ||||||||
| Foreign | 412 | 447 | 407 | ||||||||
| Total current tax expense (benefit) | $ | 525 | $ | 777 | $ | 590 | |||||
| Deferred tax expense (benefit) | |||||||||||
| Federal | $ | (139) | $ | (300) | $ | (326) | |||||
| State and local | (24) | (28) | (50) | ||||||||
| Foreign | 122 | (37) | (62) | ||||||||
| Total deferred tax expense (benefit) | $ | (41) | $ | (365) | $ | (438) | |||||
| Provision for (benefit from) income taxes on continuing operations | 484 | 412 | 152 | ||||||||
| Net income (loss) from continuing operations after taxes | $ | 1,204 | $ | 863 | $ | 941 | |||||
The table below provides the updated disclosure requirements of ASU 2023-09, which was adopted on a prospective basis for the year ended December 31, 2025. See Note 3 - Recent Accounting Guidance, to the Consolidated Financial Statements, for a description of the relevant disclosure requirements.
The effective income tax rate applicable to income (loss) from continuing operations before income taxes was different from the statutory U.S. federal income tax rate due to the factors listed in the following table:
| Reconciliation to U.S. Statutory Rate | For the Year Ended December 31, | |||||||
| 2025 | ||||||||
| ($ In millions) | $ | % | ||||||
| U.S. Federal statutory tax rate | $ | 354 | 21.0 | % | ||||
State and local income tax, net of federal (national) income tax effect 1 | 5 | 0.3 | % | |||||
| Foreign tax effects | ||||||||
| Argentina | ||||||||
| Statutory tax rate differential | (17) | (1.0) | % | |||||
| Withholding tax | 18 | 1.1 | % | |||||
| Exchange gains/losses | (31) | (1.8) | % | |||||
| Changes in valuation allowances | 73 | 4.3 | % | |||||
| Other | (3) | (0.2) | % | |||||
| Brazil | ||||||||
| Withholding tax | 37 | 2.2 | % | |||||
Changes in valuation allowances 2 | 153 | 9.1 | % | |||||
| Other | (4) | (0.2) | % | |||||
| India | ||||||||
| Statutory tax rate differential | 17 | 1.0 | % | |||||
| Agriculture exemption | (41) | (2.4) | % | |||||
| Withholding tax | 31 | 1.8 | % | |||||
| Other | 1 | 0.1 | % | |||||
| Switzerland | ||||||||
| Statutory tax rate differential | (91) | (5.4) | % | |||||
| Cantonal income tax, net | 59 | 3.5 | % | |||||
| Other | (1) | (0.1) | % | |||||
| Other foreign jurisdictions | 49 | 2.9 | % | |||||
| Effect of cross-border tax laws (net of related foreign tax credits) | ||||||||
| Global Intangible Low-Taxed Income (GILTI) | 24 | 1.4 | % | |||||
| Other | 12 | 0.7 | % | |||||
| Tax credits | ||||||||
| U.S. research and development credit | (47) | (2.8) | % | |||||
| Other foreign tax credits | (52) | (3.1) | % | |||||
Changes in valuation allowances 3 | 74 | 4.4 | % | |||||
| Nontaxable or nondeductible items | 31 | 1.8 | % | |||||
| Changes in unrecognized tax benefits | (19) | (1.1) | % | |||||
| Other | ||||||||
Capital loss 3 | (77) | (4.6) | % | |||||
Legal entity tax characterization 4 | (49) | (2.9) | % | |||||
| Other | (22) | (1.3) | % | |||||
| Effective tax rate | $ | 484 | 28.7 | % | ||||
1.State taxes in Minnesota made up the majority (greater than 50%) of the tax effect in this category.
2.For the year ended December 31, 2025, the company established a valuation allowance recorded against the net deferred tax asset position of a legal entity in Brazil (Crop Protection business) in the amount of $132 million.
3.For the year ended December 31, 2025, a U.S. federal tax benefit of $(27) million, net of valuation allowance, was recorded to recognize a capital loss in a wholly owned foreign investment.
4.For the year ended December 31, 2025, a U.S. federal deferred tax benefit was recorded associated with a change in a legal entity's U.S. tax characterization in the amount of $(49) million.
As previously disclosed for the years ended December 31, 2024 and 2023, prior to the adoption of ASU 2023-09, the effective income tax rate differs from the statutory federal income tax rate as follows:
| Reconciliation to U.S. Statutory Rate | For the Year Ended December 31, | |||||||
| 2024 | 2023 | |||||||
| Statutory U.S. federal income tax rate | 21.0 | % | 21.0 | % | ||||
Effective tax rates on international operations - net 1 | 4.8 | (1.8) | ||||||
Acquisitions, divestitures and ownership restructuring activities 2 | (1.1) | 3.6 | ||||||
| U.S. research and development credit | (4.7) | (5.9) | ||||||
Exchange gains/losses 3 | 1.7 | 2.0 | ||||||
| State and local incomes taxes - net | 1.3 | 0.9 | ||||||
Impact of Swiss Tax Changes 4 | — | (7.9) | ||||||
| Excess tax benefits/deficiencies from stock compensation | (0.2) | (0.5) | ||||||
| Tax settlements and expiration of statute of limitations | (1.7) | (0.3) | ||||||
Impact of Brazil valuation allowance 6 | 9.4 | — | ||||||
Repatriation of foreign earnings 5 | 1.7 | 2.9 | ||||||
| Other – net | 0.1 | (0.1) | ||||||
| Effective tax rate on income from continuing operations | 32.3 | % | 13.9 | % | ||||
1. Includes the effects of local and U.S. taxes related to earnings of non-U.S. subsidiaries, changes in the amount of unrecognized tax benefits associated with these earnings, losses at non-U.S. subsidiaries without local tax benefits due to valuation allowances, and other permanent differences between tax and U.S. GAAP results.
2. Includes net tax charge of $46 million for the year ended December 31, 2023, associated with intellectual property realignment.
3. Principally reflects the impact of foreign exchange gains and losses on net monetary assets for which no corresponding tax impact is realized. Further information about the company's foreign currency hedging program is included in Note 6 - Supplementary Information, and Note 19 - Financial Instruments, to the Consolidated Financial Statements, under the heading "Foreign Currency Risk."
4. Includes net tax benefits of $(62) million and $(24) million for the year ended December 31, 2023, related to changes in deferred taxes and a tax currency change, respectively.
5. Includes the effect of withholding tax on distribution of foreign earnings to the U.S., net of U.S. foreign tax credits.
6. For the year ended December 31, 2024, a charge of $120 million was recorded to establish a valuation allowance against the net deferred tax asset position of
a legal entity in Brazil (Seed business).
Significant jurisdictions in which income taxes were paid (net of refunds received) are shown below:
| Income Taxes Paid, Net | For the Year Ended December 31, | ||||
| (In millions) | 2025 | ||||
| US Federal | $ | 195 | |||
| US State and Local | 49 | ||||
| Brazil | 72 | ||||
| India | 42 | ||||
| Switzerland, Federal | 59 | ||||
| Switzerland, Geneva | 46 | ||||
| Other Foreign | 287 | ||||
| Total | $ | 750 | |||
Significant components of the company's net deferred tax asset (liability) were attributable to:
| Deferred Tax Balances | December 31, 2025 | December 31, 2024 | ||||||||||||
| (In millions) | Assets | Liabilities | Assets | Liabilities | ||||||||||
| Property | $ | — | $ | 347 | $ | — | $ | 278 | ||||||
Operating loss and tax credit carryforwards 1 | 631 | — | 552 | — | ||||||||||
| Accrued employee benefits | 678 | — | 671 | — | ||||||||||
| Other accruals and reserves | 767 | — | 590 | — | ||||||||||
| Intangibles | — | 1,828 | — | 1,950 | ||||||||||
| Inventory | 275 | — | 184 | — | ||||||||||
| Research and development capitalization | 689 | — | 761 | — | ||||||||||
| Investments | 53 | — | 69 | — | ||||||||||
| Unrealized exchange gains/losses | — | 4 | — | 50 | ||||||||||
| Other – net | 42 | — | 40 | — | ||||||||||
| Subtotal | $ | 3,135 | $ | 2,179 | $ | 2,867 | $ | 2,278 | ||||||
Valuation allowances 2 | (887) | — | (666) | — | ||||||||||
| Total | $ | 2,248 | $ | 2,179 | $ | 2,201 | $ | 2,278 | ||||||
| Net deferred tax asset (liability) | $ | 69 | $ | (77) | ||||||||||
1. Primarily related to tax loss and credit carryforwards from operations in the United States, Argentina, Brazil, Switzerland, and Spain.
2. During the year ended December 31, 2025, the company established a valuation allowance recorded against the net deferred tax asset position of a legal entity in Brazil (Crop Protection business) in the amount of $132 million. During the year ended December 31, 2024, the company established a valuation allowance against the net deferred tax asset position of a legal entity in Brazil (Seed business) in the amount of $120 million.
Details of the company’s operating loss and tax credit carryforwards are shown in the following table:
| Operating Loss and Tax Credit Carryforwards | Deferred Tax Asset | |||||||
| (In millions) | December 31, 2025 | December 31, 2024 | ||||||
| Operating loss carryforwards | ||||||||
| Expire within 5 years | $ | 290 | $ | 222 | ||||
| Expire after 5 years or indefinite expiration | 213 | 226 | ||||||
| Total operating loss carryforwards | $ | 503 | $ | 448 | ||||
| Tax credit carryforwards | ||||||||
| Expire within 5 years | $ | 25 | $ | 13 | ||||
| Expire after 5 years or indefinite expiration | 103 | 91 | ||||||
| Total tax credit carryforwards | $ | 128 | $ | 104 | ||||
| Total operating loss and tax credit carryforwards | $ | 631 | $ | 552 | ||||
A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows:
| Total Gross Unrecognized Tax Benefits | For the Year Ended December 31, | ||||||||||
| (In millions) | 2025 | 2024 | 2023 | ||||||||
| Total unrecognized tax benefits as of beginning of period | $ | 263 | $ | 390 | $ | 357 | |||||
| Decreases related to positions taken on items from prior years | (1) | (4) | — | ||||||||
| Increases related to positions taken on items from prior years | 94 | 13 | 23 | ||||||||
| Increases related to positions taken in the current year | 9 | 12 | 16 | ||||||||
| Settlement of uncertain tax positions with tax authorities | (24) | (140) | (4) | ||||||||
| Decreases due to expiration of statutes of limitations | (5) | (5) | (2) | ||||||||
| Exchange (gain) loss | (1) | (3) | — | ||||||||
| Total unrecognized tax benefits as of end of period | $ | 335 | $ | 263 | $ | 390 | |||||
| Total unrecognized tax benefits that, if recognized, would impact the effective tax rate | $ | 243 | $ | 176 | $ | 173 | |||||
| Total amount of interest and penalties (benefits) recognized in provision for (benefit from) income taxes on continuing operations | $ | (9) | $ | (4) | $ | 1 | |||||
| Total accrual (receivable) for interest and penalties associated with unrecognized tax benefits at end of period | $ | (15) | $ | (2) | $ | 11 | |||||
Each year the company files hundreds of tax returns in the various national, state and local income taxing jurisdictions in which it operates. These tax returns are subject to examination and possible challenge by the tax authorities. Positions challenged by the tax authorities may be settled or appealed by the company. As a result, there is an uncertainty in income taxes recognized in the company's financial statements in accordance with accounting for income taxes and accounting for uncertainty in income taxes. As of December 31, 2025 and 2024, the company has an advance deposit balance of $95 million and $100 million, respectively, to a foreign taxing authority, partially as a prerequisite to petition the court related to an open tax examination. These payments are accounted for as a prepaid asset, included in other assets in the Consolidated Balance Sheets.
Tax years that remain subject to examination for the company’s major tax jurisdictions are shown below:
Tax Years Subject to Examination by Major Tax Jurisdiction at December 31, 2025 | Earliest Open Year | ||||
| Jurisdiction | |||||
| Argentina | 2018 | ||||
| Brazil | 2018 | ||||
| Canada | 2017 | ||||
| China | 2015 | ||||
| France | 2023 | ||||
| India | 2023 | ||||
| Italy | 2019 | ||||
| Spain | 2020 | ||||
| Switzerland | 2020 | ||||
| United States: | |||||
| Federal income tax | 2012 | ||||
| State and local income tax | 2012 | ||||
Undistributed earnings of foreign subsidiaries and related companies that are deemed to be indefinitely invested amounted to $4,158 million at December 31, 2025. Distributions of profits from non-U.S. subsidiaries are subject to certain taxes upon repatriation, primarily where foreign withholding taxes apply; these taxes are partially offset by U.S. foreign tax credits. The company is asserting indefinite reinvestment related to certain investments in foreign subsidiaries. Determination of the amount of unrecognized deferred tax liability related to indefinitely reinvested profits is not feasible primarily due to our legal entity structure and the complexity of U.S. and local tax laws.
For periods between the Merger on August 31, 2017, and the Corteva Distribution, Corteva and its subsidiaries were included in DowDuPont's consolidated federal income tax group and consolidated tax return. Generally, the consolidated tax liability of the DowDuPont U.S. tax group for each year was apportioned among the members of the consolidated group based on each member’s separate taxable income. Corteva, DuPont and Dow intend that to the extent federal and/or state corporate income tax
liabilities are reduced through the utilization of tax attributes of the other, settlement of any receivable and payable generated from the use of the other party’s sub-group attributes will be in accordance with a tax sharing agreement and/or Tax Matters Agreement. See Note 15 - Commitments and Contingent Liabilities, to the Consolidated Financial Statements for further information related to indemnifications between Corteva, DuPont and Dow.
On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was signed into law, enacting changes in a wide array of policy areas, including federal tax law. The impacts of OBBBA are included in the financial statements for the year ended December 31, 2025, including the reinstatement of expensing of domestic research and development expenditures.
On August 16, 2022, the U.S. federal government enacted the Inflation Reduction Act of 2022 (“the Act”). The Act includes tax provisions, among other things, which implement (i) a 15 percent minimum tax on book income of certain large corporations and (ii) a one percent excise tax on net stock repurchases. The Act did not have a material impact on the company’s financial position, results of operations or cash flows.
In December 2021, the Organization for Economic Cooperation and Development ("OECD") released the Pillar Two Model rules (also referred to as the global minimum tax or Global Anti-Base Erosion "GloBE" rules), which were designed to ensure multinational enterprises pay a certain level of tax within every jurisdiction in which they operate. Several jurisdictions in which we operate have enacted these rules. For the year ended December 31, 2025, there is no material tax charge associated with these rules. The company will continue to monitor and evaluate legislative developments.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 12, 2026 | Showing above |
| 2024 | Feb 14, 2025 | |
| 2023 | Feb 8, 2024 | |
| 2022 | Feb 9, 2023 | |
| 2021 | Feb 10, 2022 | |
| 2020 | Feb 11, 2021 | |
| 2019 | Feb 14, 2020 | |
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.