Structure Therapeutics Inc. Income Taxes Disclosure

10. Income Taxes

The components of income (loss) before income taxes by U.S. and foreign jurisdictions are as follows (in thousands):

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The provision for (benefit from) income taxes consists of the following (in thousands):

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The Company adopted ASU 2023-09 retrospectively in the year ended December 31, 2025. The Company is domiciled in the Cayman Islands; however, it is a resident for U.S. federal income tax purposes. Consequently, the Company has elected to use the U.S. federal statutory income tax rate of 21% as the applicable statutory rate for its effective tax rate reconciliation. This rate is the rate of the primary jurisdiction in which the Company is subject to income tax. A reconciliation of the U.S. federal statutory income tax rate to its effective tax rate, pursuant to the disclosure requirements of ASU 2023-09 for the years ended December 31, 2025, 2024 and 2023, are as follows (in thousands, except percentages):

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¹ The states that contribute to the majority (greater than 50%) of the tax effect in this category include California for 2025, 2024, and 2023.

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Cash paid for income taxes, net of refunds received, by jurisdiction pursuant to the disclosure requirements of ASU 2023-09 for the years ended December 31, 2025, 2024 and 2023, are as follows (in thousands):

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A valuation allowance has been recognized to offset the Company’s deferred tax assets, as necessary, by the amount of any tax benefits that, based on evidence, are not expected to be realized.

Significant components of the Company’s deferred tax asset or liability are shown below (in thousands):

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The Company considers the earnings of its foreign subsidiaries to be indefinitely reinvested outside of the U.S. The amount of unrecognized deferred tax liability on these undistributed earnings where the potential income taxes or foreign withholding taxes that might arise if such earnings were distributed in the future was not material as of December 31, 2025 where the potential U.S. income taxes or foreign withholding taxes that might arise if such earnings were distributed in the future.

The Company maintained a full valuation allowance against its U.S. net deferred tax assets as of December 31, 2025, 2024 and 2023. The valuation allowance increased by $38.8 million, $16.6 million and $23.8 million during the years ended December 31, 2025, 2024 and 2023, respectively. The change in valuation allowance for the year ended December 31, 2025 is primarily attributable to domestic net operating loss carryforwards primarily due to the full expensing of domestic research or experimental (“R&E”) expenditures of $91.7 million resulting from the One Big Beautiful Bill Act (the “OBBBA”). The change in valuation allowance for the year ended December 31, 2024 is primarily attributable to the capitalization of R&E expenditures of $16.4 million resulting from the Tax Cuts and Jobs Act (“TCJA”). The change in valuation allowance for the year ended December 31, 2023 is primarily attributable to increases in current year net operating loss (“NOL”) carryforwards of $10.4 million and the capitalization of R&E expenditures of $10.9 million. The Company will continue to assess the likelihood of realization of its deferred tax assets in each of the applicable jurisdictions in future periods and will adjust the valuation allowance accordingly.

As of December 31, 2025, the Company had U.S. federal NOLs and federal tax credit carryforwards of $194.5 million and $10.8 million, respectively. The federal NOLs will begin to expire in 2036 and the federal tax credits will begin to expire in 2039, if not utilized. In addition, as of December 31, 2025, the Company had state NOLs and state tax credit carryforwards of approximately $275.8 and $2.4 million, respectively, as reported on the Company’s state income tax returns. The state NOLs will begin to expire in 2036, if not utilized. State tax credits and the federal NOLs carryforwards incurred in tax years beginning after December 31, 2017 can be carried forward indefinitely.

Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the “Code”), a corporation that undergoes an “ownership change” is subject to limitations on its ability to utilize its pre-change NOLs and tax attributes to offset future taxable income or tax liability. The Company may have undergone ownership changes in the past, which could result in limitations on its ability to utilize its NOLs, or future changes in its stock ownership, some of which are outside of its control, could result in an ownership change under Section 382 and similar state provisions. Such an annual limitation could result in the expiration of the NOLs and tax credit carryforwards before utilization, and it would not be material to the consolidated financial statements.

A reconciliation of the beginning and ending balances of total unrecognized tax benefits are as follows (in thousands):

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As of December 31, 2025, 2024 and 2023, the Company had gross unrecognized tax benefits of approximately $9.5 million, $7.9 million and 0.9 million, respectively, related to research and development tax credits and state NOLs, all of which would give rise to additional deferred tax assets if recognized. This would also give rise to a corresponding increase in the valuation allowance, and would not impact the Company’s effective tax rate. The Company did not accrue interest or penalties related to unrecognized tax benefits because the liability would be offset by existing tax attributes as of December 31, 2025, 2024 and 2023.

The Company is subject to taxation in the United States and foreign jurisdictions. As of December 31, 2025, the Company’s tax years 2017 to 2025 remain subject to examination in most jurisdictions. As of December

31, 2025, the Company was not under examination by the Internal Revenue Service, or by any state or foreign tax jurisdiction. Due to differing interpretations of tax laws and regulations, tax authorities may dispute the Company’s tax filing positions. The Company evaluates its exposures associated with its tax filing positions.