IQVIA HOLDINGS INC.IQV
IQVIA HOLDINGS INC. Income Taxes Disclosure
Income Taxes
The components of income before income taxes and equity in earnings of unconsolidated affiliates are as follows:
| Year Ended December 31, | ||||||||||||||||||||
| (in millions) | 2025 | 2024 | 2023 | |||||||||||||||||
| Domestic | $ | 94 | $ | 214 | $ | 108 | ||||||||||||||
| Foreign | 1,497 | 1,455 | 1,351 | |||||||||||||||||
| $ | 1,591 | $ | 1,669 | $ | 1,459 | |||||||||||||||
The components of income tax expense attributable to continuing operations are as follows:
| Year Ended December 31, | ||||||||||||||||||||
| (in millions) | 2025 | 2024 | 2023 | |||||||||||||||||
| Current expense: | ||||||||||||||||||||
Federal and state | $ | 49 | $ | 44 | $ | 21 | ||||||||||||||
| Foreign | 383 | 386 | 349 | |||||||||||||||||
| 432 | 430 | 370 | ||||||||||||||||||
| Deferred (benefit) expense: | ||||||||||||||||||||
| Federal and state | (132) | (116) | (236) | |||||||||||||||||
| Foreign | (48) | (13) | (33) | |||||||||||||||||
| (180) | (129) | (269) | ||||||||||||||||||
| $ | 252 | $ | 301 | $ | 101 | |||||||||||||||
The differences between the Company’s consolidated income tax expense attributable to continuing operations and the expense computed at the United States statutory income tax rate of 21% were as follows:
| Year Ended December 31, | ||||||||||||||
| (in millions) | 2025 | |||||||||||||
| Federal income tax expense at statutory rate | $ | 334 | 21.0 | % | ||||||||||
| Foreign tax effects | 23 | 1.4 | % | |||||||||||
| Effect of cross-border tax laws | ||||||||||||||
| Foreign Derived Intangible Income ("FDII") | (57) | (3.6) | % | |||||||||||
| Foreign earnings subject to US tax, net of related foreign tax credits | (56) | (3.5) | % | |||||||||||
| Change in unrecognized tax benefits | 11 | 0.7 | % | |||||||||||
| Other | (3) | (0.2) | % | |||||||||||
| $ | 252 | 15.8 | % | |||||||||||
| Year Ended December 31, | ||||||||||||||
| (in millions) | 2024 | 2023 | ||||||||||||
| Federal income tax expense at statutory rate | $ | 351 | $ | 306 | ||||||||||
| State and local income taxes, net of federal effect | 9 | 16 | ||||||||||||
| Research and development | (28) | (25) | ||||||||||||
| United States taxes recorded on foreign earnings(*) | (79) | (41) | ||||||||||||
| Tax contingencies | 14 | 17 | ||||||||||||
| Foreign Derived Intangible Income (“FDII”) | (56) | (53) | ||||||||||||
| Foreign rate differential | 87 | 45 | ||||||||||||
| Equity compensation | 3 | — | ||||||||||||
| Valuation Allowance Release | — | (102) | ||||||||||||
| Basis Difference Reversal | — | (61) | ||||||||||||
| Other | — | (1) | ||||||||||||
| $ | 301 | $ | 101 | |||||||||||
(*) Includes impact of GILTI, and other U.S. taxes on foreign earnings.
The Company's effective income tax rate was 15.8%, 18.0%, and 6.9% for the years ending December 31, 2025, 2024 and 2023, respectively. The Company's effective income tax rate for the year ended December 31, 2025 was favorably impacted due to changes in the geographical mix of earnings amongst the United States and foreign tax jurisdictions, compared to the Company's effective income tax rate for the year ended December 31, 2024.
The Company's effective income tax rate for the year ended December 31, 2023, was favorably impacted due to the completion of an internal legal entity restructuring that resulted in a benefit of $125 million. Historically, the Company recorded deferred tax assets related to certain foreign tax credits, and a full valuation allowance in relation to these foreign tax credits was established as it was not expected the credits would be utilized prior to expiration. During 2023, the Company decided it was reasonably possible that these foreign tax credits will be utilized and therefore recorded a tax benefit of $64 million related to the valuation allowance release and established related uncertain tax positions. Additionally, due to the restructuring the Company also reversed a deferred tax liability of $61 million due to a basis difference that was recovered in a tax-free manner. The effective tax rate for the year ended December 31, 2023 was also favorably impacted by a reversal of uncertain tax positions relating to tax credit carryforwards in the amount of $21 million due to an audit settlement.
On July 4, 2025, the U.S. government enacted the One Big Beautiful Bill Act ("OBBBA"), which includes several changes to U.S. federal income tax law, including the temporary and permanent extension, of expiring provisions of the Tax Cuts and Jobs Act of 2017. The impacts of the OBBBA did not have a material impact on the 2025 consolidated financial statements, however the Company will continue to evaluate impacts to future periods.
On December 12, 2022, the European Union member states agreed to implement the Organization for Economic Co-operation and Development’s (“OECD”) Pillar Two global corporate minimum tax, which establishes a 15% minimum effective tax rate for multinational enterprises with consolidated revenues of at least €750 million. Certain components of Pillar Two became effective in various jurisdictions beginning in 2024. The Company has continued to evaluate the effects of Pillar Two through the end of 2025 and concluded that its adoption did not have a material impact on the Company's consolidated financial statements for the periods presented. On January 5, 2026, the OECD Inclusive Framework released Administrative Guidance introducing a "side-by-side" safe harbor regime, under which U.S. parented multinational groups may be excluded from Pillar Two's Income Inclusion Rule ("IIR") and Undertaxed Profits Rule ("UTPR"), in recognition of the U.S. tax system's existing minimum tax framework. The Company will continue to monitor and evaluate this administrative guidance in the context of jurisdictions that adopt it. Based on the Company's current analysis, this guidance does not change the Company's conclusion regarding the absence of a material impact for the current year.
Undistributed earnings of the Company’s foreign subsidiaries amounted to approximately $6,689 million as of December 31, 2025. The Company does not consider any of its foreign earnings as indefinitely reinvested.
The income tax effects of temporary differences from continuing operations that give rise to significant portions of deferred income tax assets (liabilities) are presented below:
| December 31, | ||||||||||||||
(in millions) | 2025 | 2024 | ||||||||||||
| Deferred income tax assets: | ||||||||||||||
| Net operating loss and other loss carryforwards | $ | 193 | $ | 176 | ||||||||||
| Tax credit carryforwards | 230 | 292 | ||||||||||||
| Accrued expenses and unearned income | 287 | 106 | ||||||||||||
| Employee benefits | 169 | 180 | ||||||||||||
| U.S. interest expense limitation | 65 | 93 | ||||||||||||
| Foreign exchange on debt instruments | 106 | — | ||||||||||||
| Other | 85 | 86 | ||||||||||||
| Total deferred income tax assets | 1,135 | 933 | ||||||||||||
| Valuation allowance for deferred income tax assets | (206) | (196) | ||||||||||||
| Total deferred income tax assets (net of valuation allowance) | 929 | 737 | ||||||||||||
| Deferred income tax liabilities: | ||||||||||||||
| Amortization and depreciation | (644) | (545) | ||||||||||||
| Foreign exchange on debt instruments | — | (104) | ||||||||||||
| Other | (106) | (90) | ||||||||||||
| Total deferred income tax liabilities | (750) | (739) | ||||||||||||
| Net deferred income tax assets (liabilities) | $ | 179 | $ | (2) | ||||||||||
During the year ended December 31, 2025, the net deferred income tax assets increased primarily due to foreign exchange revaluation of debt instruments.
The Company had federal, state and local, and foreign tax loss carryforwards and tax credits, the tax effect of which was $501 million as of December 31, 2025. Of this amount, $38 million has an indefinite carryforward period, and the remaining $463 million expires at various times beginning in 2026. Some of the federal losses are subject to limitations under the Internal Revenue Code, however, management expects these losses to be utilized during the carryforward periods.
In the year ended December 31, 2025, the Company increased its valuation allowance by $10 million to $206 million as of December 31, 2025 from $196 million as of December 31, 2024. The valuation allowance increased primarily due to current year state tax expenses on foreign exchange revaluations on debt instruments offset by use of U.S. state net operating losses.
A reconciliation of the beginning and ending amount of gross unrecognized income tax benefits is presented below:
| Year Ended December 31, | ||||||||||||||||||||
| (in millions) | 2025 | 2024 | 2023 | |||||||||||||||||
| Balance as of January 1 | $ | 146 | $ | 140 | $ | 122 | ||||||||||||||
| Additions based on tax positions related to the current year | 15 | 15 | 53 | |||||||||||||||||
| Additions for income tax positions of prior years | 5 | 17 | 8 | |||||||||||||||||
| Impact of changes in exchange rates | 2 | (2) | 1 | |||||||||||||||||
| Settlements with tax authorities | (3) | (1) | (6) | |||||||||||||||||
| Reductions for income tax positions of prior years | (4) | (18) | (25) | |||||||||||||||||
| Reductions due to the lapse of the applicable statute of limitations | (7) | (5) | (13) | |||||||||||||||||
| Balance as of December 31 | $ | 154 | $ | 146 | $ | 140 | ||||||||||||||
As of December 31, 2025, the Company had total gross unrecognized income tax benefits of $136 million associated with over 100 jurisdictions in which the Company conducts business that, if recognized, would reduce the Company’s effective income tax rate.
The Company’s policy for recording interest and penalties relating to uncertain income tax positions is to record them as a component of income tax expense in the accompanying consolidated statements of income. In the years ended December 31, 2025, 2024 and 2023, the amount of interest and penalties recorded as an addition to income tax expense in the accompanying consolidated statements of income was $3 million, $6 million and $— million, respectively. As of December 31, 2025, and 2024, the Company had accrued approximately $29 million and $26 million, respectively, of interest and penalties.
The Company conducts business globally and, as a result, files income tax returns in the United States federal jurisdiction and various state and foreign jurisdictions. In the normal course of business, the Company is subject to examination by taxing authorities throughout the world. The following table summarizes the tax years that remain open for examination by tax authorities in the most significant jurisdictions in which the Company operates:
| United States | 2022-2024 | ||||
| India | 2006-2025 | ||||
| Japan | 2019-2024 | ||||
| United Kingdom | 2023-2024 | ||||
| Switzerland | 2022-2024 | ||||
| Singapore | 2019-2024 | ||||
In certain of the jurisdictions noted above, the Company operates through more than one legal entity, each of which has different open years subject to examination. The table above presents the open years subject to examination for the most material of the legal entities in each jurisdiction. Additionally, it is important to note that tax years are technically not closed until the statute of limitations in each jurisdiction expires. In the jurisdictions noted above, the statute of limitations can extend beyond the open years subject to examination.
Due to the geographic breadth of the Company’s operations, numerous tax audits may be ongoing throughout the world at any point in time. Income tax liabilities are recorded based on estimates of additional income taxes that may be due upon the conclusion of these audits. Estimates of these income tax liabilities are made based upon prior experience and are updated in light of changes in facts and circumstances. However, due to the uncertain and complex application of income tax regulations, it is possible that the ultimate resolution of audits may result in liabilities that could be materially different from these estimates. In such an event, the Company will record additional income tax expense or income tax benefit in the period in which such resolution occurs.
The components of income taxes paid, net of refunds (inclusive of withholding taxes), are presented below:
| (in millions) | Year Ended December 31, 2025 | |||||||
| United Kingdom | $ | 105 | ||||||
| Singapore | 47 | |||||||
| Japan | 37 | |||||||
| India | 28 | |||||||
| Other | 178 | |||||||
| Total income taxes paid, net of refunds (inclusive of withholding taxes) | $ | 395 | ||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 17, 2026 | Showing above |
| 2024 | Feb 13, 2025 | |
| 2023 | Feb 15, 2024 | |
| 2022 | Feb 15, 2023 | |
| 2021 | Feb 16, 2022 | |
| 2020 | Feb 12, 2021 | |
| 2019 | Feb 18, 2020 | |
| 2018 | Feb 19, 2019 | |
| 2017 | Feb 16, 2018 | |
| 2016 | Feb 16, 2017 | |
| 2015 | Feb 11, 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.