EBAY INCEBAY
EBAY INC Income Taxes Disclosure
Income Taxes
The following table presents the components of “Income from continuing operations before income taxes” for the periods indicated (in millions):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| United States | $ | 1,325 | $ | 1,286 | $ | 704 | |||||||||||
| International | 982 | 992 | 3,003 | ||||||||||||||
| $ | 2,307 | $ | 2,278 | $ | 3,707 | ||||||||||||
The following table summarizes the “Income tax provision” for the periods indicated (in millions):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Current: | |||||||||||||||||
| Federal | $ | 127 | $ | 985 | $ | 488 | |||||||||||
| State and local | 39 | 89 | 94 | ||||||||||||||
| Foreign | 101 | 97 | 95 | ||||||||||||||
| 267 | 1,171 | 677 | |||||||||||||||
| Deferred: | |||||||||||||||||
| Federal | 89 | (993) | 112 | ||||||||||||||
| State and local | 12 | (46) | (41) | ||||||||||||||
| Foreign | (57) | 165 | 184 | ||||||||||||||
| 44 | (874) | 255 | |||||||||||||||
| $ | 311 | $ | 297 | $ | 932 | ||||||||||||
The following table presents a reconciliation of the U.S. federal statutory rate of 21.0% to our effective tax rate pursuant to the prospective adoption of ASU 2023-09 for the year ended December 31, 2025 (in millions, except percentages):
| Year Ended December 31, | |||||||||||
| 2025 | |||||||||||
Provision at U.S. federal statutory rate | $ | 484 | 21.0 | % | |||||||
State and local income taxes, net of federal income tax effect (1) | 48 | 2.1 | % | ||||||||
| Foreign tax effects: | |||||||||||
Switzerland: | |||||||||||
| Federal rate differential | (114) | (4.9) | % | ||||||||
| Other | (24) | (1.0) | % | ||||||||
| Cantonal taxes | 63 | 2.7 | % | ||||||||
India: | |||||||||||
Withholding tax | (40) | (1.7) | % | ||||||||
| Other foreign jurisdictions | 11 | 0.5 | % | ||||||||
| Enactment of changes in tax laws or enacted in the current period | (65) | (2.8) | % | ||||||||
| Effect of cross-border tax laws | |||||||||||
Subpart F | 11 | 0.5 | % | ||||||||
GILTI | 30 | 1.3 | % | ||||||||
| Tax credits | |||||||||||
Research and development tax credits | (97) | (4.2) | % | ||||||||
| Changes in valuation allowance | 6 | 0.3 | % | ||||||||
| Nontaxable or nondeductible items | |||||||||||
Share-based payment awards | (32) | (1.4) | % | ||||||||
Other | 13 | 0.5 | % | ||||||||
| Changes in unrecognized tax benefits | 5 | 0.2 | % | ||||||||
| Other adjustments | 12 | 0.4 | % | ||||||||
Effective tax rate | $ | 311 | 13.5 | % | |||||||
(1)State taxes in Illinois and California made up the majority (greater than 50%) of the tax effect in this category.
The following table presents a reconciliation of the U.S. federal statutory rate of 21.0% to our effective tax rate for the years ended December 31, 2024 and 2023 (in millions):
| Year Ended December 31, | |||||||||||
| 2024 | 2023 | ||||||||||
Provision at statutory rate | $ | 478 | $ | 778 | |||||||
| Foreign income taxed at different rates | 5 | 8 | |||||||||
| Other taxes on foreign operations | (157) | 72 | |||||||||
| Change in valuation allowance | — | (62) | |||||||||
| Stock-based compensation | 7 | 33 | |||||||||
| State taxes, net of federal benefit | 43 | 53 | |||||||||
| Research and other tax credits | (83) | (44) | |||||||||
| Penalties | (13) | 14 | |||||||||
| Impact of tax rate change | — | 73 | |||||||||
| Other | 17 | 7 | |||||||||
| $ | 297 | $ | 932 | ||||||||
The following table summarizes the cash paid for income taxes for the periods indicated (in millions):
| Year Ended December 31, | |||||
| 2025 | |||||
Federal (United States) | $ | 1,139 | |||
State | 102 | ||||
Foreign (International) (1) | 216 | ||||
Total (2) | $ | 1,457 | |||
(1)Foreign cash paid for income taxes (net of refunds received) in 2025 includes $122 million related to Switzerland.
(2)Total cash paid for income taxes includes $50 million related to discontinued operations.
Total cash paid for income taxes from continuing operations in 2024 and 2023 was $722 million and $746 million, respectively.
Deferred tax assets and liabilities are recognized for the future tax consequences of differences between the carrying amounts of assets and liabilities and their respective tax bases using enacted tax rates in effect for the year in which the differences are expected to be reversed. The following table summarizes significant deferred tax assets and liabilities as of the dates indicated (in millions):
| As of December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Deferred tax assets: | |||||||||||
| Net operating loss, capital loss and credits | $ | 220 | $ | 181 | |||||||
| Accruals and allowances | 524 | 554 | |||||||||
| Capitalized research expense | 435 | 475 | |||||||||
| Stock-based compensation | 8 | 10 | |||||||||
Net unrealized loss on investments | 1 | — | |||||||||
| Amortizable tax basis in intangibles | 2,741 | 2,701 | |||||||||
Total deferred tax assets | 3,929 | 3,921 | |||||||||
Less: valuation allowance | (196) | (163) | |||||||||
Deferred tax assets, net of valuation allowance | 3,733 | 3,758 | |||||||||
| Deferred tax liabilities: | |||||||||||
| Outside basis differences | (1,959) | (1,970) | |||||||||
| Acquisition-related intangibles | (69) | (57) | |||||||||
| Depreciation and amortization | (218) | (197) | |||||||||
| Net unrealized gain on investments | — | (3) | |||||||||
Total deferred tax liabilities | (2,246) | (2,227) | |||||||||
Net deferred tax assets | $ | 1,487 | $ | 1,531 | |||||||
As of December 31, 2025, our federal, state and foreign net operating loss carryforwards for income tax purposes were $35 million, $35 million and $125 million, respectively. The federal and state net operating loss carryforwards are subject to various limitations under Section 382 of the Internal Revenue Code and applicable state tax laws. If not utilized, the federal net operating loss carryforwards will begin to expire in 2027 and state net operating loss carryforwards will continue to expire in 2026. The carryforward periods on our foreign net operating loss carryforwards are as follows: $35 million do not expire and $91 million are subject to valuation allowance and continue to expire in 2026. As of December 31, 2025, state tax credit carryforwards for income tax purposes were $239 million. Most of the state tax credits carry forward indefinitely.
As of December 31, 2025 and 2024, we maintained a valuation allowance with respect to certain of our deferred tax assets relating primarily to operating losses in certain non-U.S. jurisdictions and certain state tax credits and capital losses that we believe are not likely to be realized. The following table summarizes the valuation allowance activity for the periods indicated (in millions):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
Opening balance | $ | 163 | $ | 143 | $ | 231 | |||||||||||
Charged to net income | 42 | 32 | (73) | ||||||||||||||
Foreign currency translation adjustment | — | (5) | (8) | ||||||||||||||
Write-offs, net of recoveries | (9) | (7) | (7) | ||||||||||||||
Closing balance | $ | 196 | $ | 163 | $ | 143 | |||||||||||
We have recognized the tax consequences of all foreign unremitted earnings and management has no specific plans to indefinitely reinvest the unremitted earnings of our foreign subsidiaries as of the balance sheet date. In 2025, we made the final payment of $292 million related to the repatriation of foreign earnings previously included in “Income taxes payable” on our consolidated balance sheet as of December 31, 2024. We have not provided for deferred taxes on outside basis differences in our investments in our foreign subsidiaries that are unrelated to unremitted earnings. These basis differences will be indefinitely reinvested. A determination of the unrecognized deferred taxes related to these other components of our outside basis difference is not practicable.
The following table presents changes in unrecognized tax benefits for the periods indicated (in millions):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Gross amounts of unrecognized tax benefits as of the beginning of the period | $ | 674 | $ | 613 | $ | 493 | |||||||||||
| Increases related to prior period tax positions | 86 | 22 | 120 | ||||||||||||||
| Decreases related to prior period tax positions | (151) | (23) | (45) | ||||||||||||||
| Increases related to current period tax positions | 85 | 67 | 53 | ||||||||||||||
| Settlements | (173) | (5) | (8) | ||||||||||||||
| Gross amounts of unrecognized tax benefits as of the end of the period | $ | 521 | $ | 674 | $ | 613 | |||||||||||
As of December 31, 2025, gross amounts of unrecognized tax benefits of $521 million included $8 million of unrecognized tax benefits indemnified by PayPal. As of December 31, 2024, gross amounts of unrecognized tax benefits of $674 million included $45 million of unrecognized tax benefits indemnified by PayPal. If total unrecognized tax benefits were realized in a future period, it would result in a tax benefit of $309 million. Of this amount, $6 million of unrecognized tax benefit is indemnified by PayPal and a corresponding receivable would be reduced upon a future realization. As of December 31, 2025, our liabilities for unrecognized tax benefits were included in “Other liabilities” on our consolidated balance sheet.
As of December 31, 2025, and 2024 we had accrued interest and penalty expense related to uncertain tax positions of $61 million and $130 million, respectively, net of income tax benefits. The “Income tax provision” for 2025 and 2024 included interest income (expense) related to uncertain tax positions of $3 million and $(31) million, respectively, net of tax benefits. The “Income (loss) from discontinued operations, net of income taxes,” for 2025 and 2024 included interest income (expense) related to uncertain tax positions of $8 million and $(1) million, respectively, net of tax benefits.
We are subject to both direct and indirect taxation in the United States and various states and foreign jurisdictions. We are under examination by certain tax authorities for the 2017 to 2024 tax years. We believe that adequate amounts have been reserved for any adjustments that may ultimately result from these or other examinations. The material jurisdictions where we are subject to potential examination by tax authorities for tax years after 2009 include, among others, the United States (at the federal level and in the State of California), Germany, India, Israel, Switzerland and the United Kingdom.
The timing of the resolution and/or closure of audits is highly uncertain. Given the number of years remaining subject to examination and the number of matters being examined, we are unable to estimate the full range of possible adjustments to the balance of gross unrecognized tax benefits.
On July 4, 2025, the United States enacted the One Big Beautiful Bill Act. Included in this legislation are provisions that allow for the immediate expensing of domestic research and development and certain capital expenditures, as well as other changes related to the taxation of profits derived from foreign operations. We recorded a $65 million net tax benefit in 2025 related to the effects of this Act.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 19, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Feb 28, 2024 | |
| 2022 | Feb 23, 2023 | |
| 2021 | Feb 24, 2022 | |
| 2020 | Feb 4, 2021 | |
| 2019 | Jan 31, 2020 | |
| 2018 | Jan 30, 2019 | |
| 2017 | Feb 5, 2018 | |
| 2016 | Feb 6, 2017 | |
| 2015 | Feb 1, 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.