Liberty Latin America Ltd.LILA
Liberty Latin America Ltd. Income Taxes Disclosure
Income Taxes
On July 11, 2017, Liberty Latin America was formed as a corporation in Bermuda. Effective as of January 1, 2025, Bermuda enacted the Corporate Income Tax Act 2023, which assesses taxes on income at a 15% statutory rate. For all years prior to this, Bermuda did not assess taxes on income. The majority of subsidiaries in other jurisdictions are taxable operations and file income tax returns in their respective jurisdictions. The income taxes of Liberty Latin America are presented on a standalone basis, and each tax paying entity or group within Liberty Latin America is presented on a separate return basis, unless a combined or consolidated tax return regime is permitted.
The components of our loss before income taxes are as follows:
| Year ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| in millions | |||||||||||||||||
| Domestic (a) | $ | (105.7) | $ | (68.7) | $ | (90.9) | |||||||||||
| Foreign (b) (c) | (547.1) | (591.2) | 28.5 | ||||||||||||||
| Total | $ | (652.8) | $ | (659.9) | $ | (62.4) | |||||||||||
(a)Liberty Latin America is considered a stand-alone Bermuda entity.
(b)Amounts for the year ended December 31, 2025 include a spectrum of $494 million and for the year ended December 31, 2024 include a of $516 million, both of which occurred at our Liberty Puerto Rico reporting unit.
(c)For the year ended December 31, 2025, significant jurisdictions that comprise the “foreign” component of our loss before income taxes are detailed in the effective rate reconciliation section below. For the year ended December 31, 2024, significant jurisdictions that comprise the “foreign” component of our loss before income taxes include The Bahamas, Barbados, Costa Rica, Jamaica, Panama, Puerto Rico, Spain, the U.K., the United States, and USVI. For the year ended December 31, 2023, significant jurisdictions that comprise the “foreign” component of our loss before income taxes include The Bahamas, Barbados, the British Virgin Islands, Colombia, Costa Rica, Jamaica, Panama, Puerto Rico, Spain, St. Kitts, St. Lucia, Trinidad and Tobago, the U.K., the United States and USVI.
Income tax benefit (expense) consists of:
| Current | Deferred | Total | |||||||||||||||
| in millions | |||||||||||||||||
| Year ended December 31, 2025: | |||||||||||||||||
| Domestic | $ | — | $ | — | $ | — | |||||||||||
| Foreign | (140.3) | 238.8 | 98.5 | ||||||||||||||
| Total | $ | (140.3) | $ | 238.8 | $ | 98.5 | |||||||||||
| Year ended December 31, 2024: | |||||||||||||||||
| Domestic | $ | — | $ | — | $ | — | |||||||||||
| Foreign | (129.1) | 129.3 | 0.2 | ||||||||||||||
| Total | $ | (129.1) | $ | 129.3 | $ | 0.2 | |||||||||||
| Year ended December 31, 2023: | |||||||||||||||||
| Domestic | $ | — | $ | — | $ | — | |||||||||||
| Foreign | (111.8) | 87.4 | (24.4) | ||||||||||||||
| Total | $ | (111.8) | $ | 87.4 | $ | (24.4) | |||||||||||
Income tax benefit (expense) attributable to our loss before income taxes for the year ended December 31, 2025 differs from the amounts computed by using the applicable tax rate as a result of the following (in millions, except percentages):
| Amount | Percent | ||||||||||
| Bermuda federal statutory income tax rate (a) | $ | 97.9 | (15.0) | % | |||||||
| Domestic federal | |||||||||||
| Changes in valuation allowances | (15.9) | 2.4 | % | ||||||||
| Foreign tax effects | |||||||||||
| Barbados | |||||||||||
| Statutory income tax rate differential | 8.2 | (1.3) | % | ||||||||
| Other | 0.4 | (0.1) | % | ||||||||
| Colombia | |||||||||||
| Other | (6.2) | 0.9 | % | ||||||||
| Costa Rica | |||||||||||
| Net nondeductible acquisition debt interest and FX | (8.5) | 1.3 | % | ||||||||
| Statutory income tax rate differential | (10.8) | 1.7 | % | ||||||||
| Other | (1.3) | 0.2 | % | ||||||||
| Curacao | |||||||||||
| Changes in valuation allowances | 26.8 | (4.1) | % | ||||||||
| Other | (3.3) | 0.5 | % | ||||||||
| Jamaica | |||||||||||
| Nontaxable capital gains | 11.0 | (1.7) | % | ||||||||
| Cross-border tax laws | (8.8) | 1.3 | % | ||||||||
| Changes in valuation allowances | 4.9 | (0.8) | % | ||||||||
| Statutory income tax rate differential | (9.8) | 1.5 | % | ||||||||
| Other | (2.7) | 0.4 | % | ||||||||
| Panama | |||||||||||
| Changes in valuation allowances | 12.0 | (1.8) | % | ||||||||
| Amount | Percent | ||||||||||
| Statutory income tax rate differential | (6.2) | 0.9 | % | ||||||||
| Other | (4.6) | 0.7 | % | ||||||||
| Puerto Rico | |||||||||||
| Tax credits | (19.7) | 3.0 | % | ||||||||
| Nontaxable interest income | 6.8 | (1.0) | % | ||||||||
| Cross-border tax laws | (10.0) | 1.5 | % | ||||||||
| Changes in valuation allowances | 49.9 | (7.6) | % | ||||||||
| Statutory income tax rate differential | 143.0 | (21.9) | % | ||||||||
| Other – Change in deferred rate already enacted | (50.4) | 7.7 | % | ||||||||
| Other | (21.4) | 3.3 | % | ||||||||
| Spain | |||||||||||
| Nondeductible investment losses | (8.5) | 1.3 | % | ||||||||
| Statutory income tax rate differential | 5.1 | (0.8) | % | ||||||||
| Other | (4.3) | 0.7 | % | ||||||||
| United Kingdom | |||||||||||
| Changes in valuation allowances | (67.9) | 10.4 | % | ||||||||
| Statutory income tax rate differential | 25.0 | (3.8) | % | ||||||||
| Other | 15.0 | (2.3) | % | ||||||||
| United States | |||||||||||
| Tax credits | 8.9 | (1.4) | % | ||||||||
| Nondeductible compensation expenses | (5.0) | 0.8 | % | ||||||||
| Cross-border tax laws | (36.5) | 5.6 | % | ||||||||
| Changes in valuation allowances | (9.8) | 1.5 | % | ||||||||
| Other | 4.1 | (0.6) | % | ||||||||
| Venezuela | |||||||||||
| Changes in valuation allowances | (7.6) | 1.2 | % | ||||||||
| Other | 5.3 | (0.8) | % | ||||||||
| Other foreign jurisdictions | (13.6) | 2.1 | % | ||||||||
| Worldwide changes in unrecognized tax benefits | 7.0 | (1.1) | % | ||||||||
| Effective income tax rate | $ | 98.5 | (15.1) | % | |||||||
Income tax benefit (expense) attributable to our loss before income taxes for the years ended December 31, 2024 and 2023, differs from the amounts computed by using the applicable tax rate, as a result of the following:
| Year ended December 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| in millions | |||||||||||
| Computed expected tax benefit (a) | $ | — | $ | — | |||||||
| Permanent differences (b) | (18.4) | (49.3) | |||||||||
| Basis and other differences in the treatment of items associated with investments in Liberty Latin America entities | 0.6 | 1.5 | |||||||||
| Increases in valuation allowances | (171.8) | (161.5) | |||||||||
| Expiration of deferred tax assets with full valuation allowance | (14.7) | (12.3) | |||||||||
| International rate differences (a) (c) | 232.8 | 88.2 | |||||||||
| Changes in uncertain tax positions | 3.7 | (0.4) | |||||||||
| Enacted tax law and rate changes (d) (e) (f) | 27.9 | 128.4 | |||||||||
| Effect of non-deductible goodwill impairments | (47.9) | — | |||||||||
| Effect of tax credits | 14.6 | 18.3 | |||||||||
| Withholding and capital gains taxes | (25.2) | (40.0) | |||||||||
| Other, net | (1.4) | 2.7 | |||||||||
| Total income tax benefit (expense) | $ | 0.2 | $ | (24.4) | |||||||
(a)Liberty Latin America was formed as a corporation in Bermuda where the company has a “statutory” or “expected” tax rate of 15%, effective as of January 1, 2025. For years ended December 31, 2023 and 2024, the Bermuda statutory tax rate was 0%. The majority of our subsidiaries operate in jurisdictions where income tax is imposed at local applicable statutory rates, resulting in “international rate differences,” as shown in the table above. These line items reflect the computed tax benefit (expense) of pre-tax book earnings (loss) in the respective taxable jurisdiction.
(b)Permanent differences primarily relate to various non-taxable income or non-deductible expenses, such as CARICOM treaty income, limitations on deductible management fees, or executive compensation, among others.
(c)The corporate tax rates applicable to our primary material jurisdictions are as follows: The Bahamas, 0%; Barbados, 9%; Costa Rica, 30%; Jamaica, 33.33%; Panama, 25%; Puerto Rico, 37.5%; Spain, 25%; the U.K., 25%; the United States, 21%; and USVI, 23.1%.
(d)On July 13, 2023, St. Vincent and the Grenadines Inland Revenue Department enacted a decrease in the corporate income tax from 30% to 28% with effect from January 1, 2023.
(e)On December 22, 2023, the Bermuda Parliament enacted legislation to establish a 15% corporate income tax regime that will become effective for tax years beginning on or after January 1, 2025. While deferred tax assets associated with opening tax losses carryforward for periods beginning January 1, 2020 were established as of enactment, there is a net nil tax impact of this on the total tax result due to a full valuation allowance in Bermuda.
(f)On May 24, 2024, the Barbados Parliament enacted legislation to increase the corporate income tax rate to 9% with effect from January 1, 2024.
Deferred income taxes reflect the impact of temporary differences between the amount of assets and liabilities recognized for financial reporting purposes and such amounts recognized for tax purposes. The components of our net deferred tax liability are as follows:
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| in millions | |||||||||||
| Deferred tax assets | $ | 204.0 | $ | 133.0 | |||||||
| Deferred tax liabilities | (411.6) | (580.3) | |||||||||
| Net deferred tax liability | $ | (207.6) | $ | (447.3) | |||||||
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are presented below:
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| in millions | |||||||||||
| Deferred tax assets: | |||||||||||
| Net operating losses, tax credits and other carryforwards | $ | 2,571.1 | $ | 2,516.0 | |||||||
| Deferred revenue | 4.6 | 9.4 | |||||||||
| Unrealized gains and losses | 2.9 | 16.0 | |||||||||
| Accrued expenses | 79.0 | 88.0 | |||||||||
| Other future deductible amounts | — | 0.1 | |||||||||
| Deferred tax assets | 2,657.6 | 2,629.5 | |||||||||
| Valuation allowance | (2,204.8) | (2,115.8) | |||||||||
| Deferred tax assets, net of valuation allowance | 452.8 | 513.7 | |||||||||
| Deferred tax liabilities: | |||||||||||
| Investments | (158.6) | (122.6) | |||||||||
| Intangible assets, net | (339.7) | (630.3) | |||||||||
| Property and equipment, net | (161.0) | (208.1) | |||||||||
| Un-remitted foreign earnings | (0.6) | — | |||||||||
| Other future taxable amounts | (0.5) | — | |||||||||
| Deferred tax liabilities | (660.4) | (961.0) | |||||||||
| Net deferred tax liability | $ | (207.6) | $ | (447.3) | |||||||
The changes in our valuation allowances are summarized below:
| Year ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| in millions | ||||||||||||||||||||
| Balance at January 1 | $ | 2,115.8 | $ | 1,942.5 | $ | 1,780.4 | ||||||||||||||
| Net tax expense related to operations | 88.0 | 171.8 | 161.5 | |||||||||||||||||
| Translation adjustments | 0.2 | (0.6) | (1.1) | |||||||||||||||||
| Business acquisitions and other | 0.8 | 2.1 | 1.7 | |||||||||||||||||
| Balance at December 31 | $ | 2,204.8 | $ | 2,115.8 | $ | 1,942.5 | ||||||||||||||
Deferred tax assets related to net operating losses may be used to offset future taxable income. The significant components of our tax loss carryforwards at December 31, 2025 are as follows:
| Country | Tax loss carryforward | Related tax asset | Expiration date | ||||||||||||||||||||
| in millions | |||||||||||||||||||||||
| U.K.: | |||||||||||||||||||||||
| Amount attributable to capital losses | $ | 4,958.1 | $ | 1,239.5 | Indefinite | ||||||||||||||||||
| Amount attributable to net operating losses | 1,335.5 | 333.9 | Indefinite | ||||||||||||||||||||
| Puerto Rico | 700.8 | 154.7 | 2026 - Indefinite | ||||||||||||||||||||
| Bermuda | 516.1 | 77.4 | Indefinite | ||||||||||||||||||||
| Barbados | 501.4 | 45.1 | 2026 - 2031 | ||||||||||||||||||||
| Jamaica | 352.2 | 117.3 | Indefinite | ||||||||||||||||||||
| Curacao | 110.0 | 24.2 | 2026 - 2035 | ||||||||||||||||||||
| U.S. | 53.7 | 12.5 | 2035 - Indefinite | ||||||||||||||||||||
| U.S. Virgin Islands | 43.5 | 10.0 | Indefinite | ||||||||||||||||||||
| Saint Martin | 23.2 | 4.6 | Indefinite | ||||||||||||||||||||
| Venezuela | 22.4 | 7.6 | 2026-2028 | ||||||||||||||||||||
| Panama | 8.8 | 2.2 | 2026 - 2028 | ||||||||||||||||||||
| Other | 26.2 | 8.2 | Various | ||||||||||||||||||||
| Total | $ | 8,651.9 | $ | 2,037.2 | |||||||||||||||||||
As of December 31, 2025, a valuation allowance of $1,895 million has been recorded against the net operating loss carryforwards where we do not expect to realize a future benefit, or where certain losses may be limited in use due to change in control or same-business tests.
Our tax loss carryforwards within each jurisdiction combine all companies’ tax losses (both capital and ordinary losses) in that jurisdiction; however, certain tax jurisdictions limit the ability to offset taxable income of a separate company or different tax group with the tax losses associated with another separate company or group. Further, tax jurisdictions restrict the type of taxable income that the above losses are able to offset.
In 2025 and 2024, we have foreign tax credit carryforwards of $21 million and $10 million, respectively, which are available in the U.S. Substantially all credits not utilized will expire at the end of 2035. A valuation allowance of $13 million has been recorded against the foreign tax credit carryforwards where we do not expect to realize a future benefit.
In 2025 and 2024, we have alternative minimum tax credit carryforwards in the amounts of $49 million and $50 million, respectively, attributable to our operations in Puerto Rico for which the current tax law provides no period of expiration. A valuation allowance of $13 million has been recorded against the alternative minimum tax credit carryforwards where we do not expect to realize a future benefit.
Through our consolidated subsidiaries, we maintain a presence in many countries. Many of these countries maintain highly complex tax regimes. We have accounted for the effect of these taxes based on what we believe is reasonably expected to apply to us and our consolidated subsidiaries based on tax laws currently in effect and reasonable interpretations of these laws. Because some jurisdictions do not have systems of taxation that are as well established as the system of income taxation used in other major industrialized countries, it may be difficult to anticipate how other jurisdictions will tax our and our consolidated subsidiaries’ current and future operations.
Although we intend to take reasonable tax planning measures to limit our tax exposures, no assurance can be given that we will be able to do so.
We file income tax returns in various jurisdictions. In the normal course of business, our income tax filings are subject to review by various taxing authorities. In connection with such reviews, disputes could arise with the taxing authorities over the
interpretation or application of certain income tax rules related to our business in that tax jurisdiction. Such disputes may result in future tax and interest and penalty assessments by these taxing authorities. The ultimate resolution of tax contingencies will take place upon the earlier of (i) the settlement date with the applicable taxing authorities in either cash or agreement of income tax positions or (ii) the date when the tax authorities are statutorily prohibited from adjusting the company’s tax computations.
In general, tax returns filed by, or that include, entities comprising Liberty Latin America for years prior to 2009 are no longer subject to examination by tax authorities. We are currently undergoing income tax audits in Colombia, Trinidad and Tobago, Venezuela and certain other jurisdictions within the Caribbean and Latin America. Except as noted below, any adjustments that might arise from the foregoing examinations are not expected to have a material impact on our consolidated financial position or results of operations.
The changes in our unrecognized tax benefits are summarized below:
| Year ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| in millions | |||||||||||||||||
| Balance at January 1 | $ | 18.3 | $ | 25.5 | $ | 37.6 | |||||||||||
| Additions for tax positions of prior years | 7.4 | 2.5 | 0.7 | ||||||||||||||
| Additions based on tax positions related to the current year | — | — | 6.0 | ||||||||||||||
| Lapse of statute of limitations | (1.5) | (2.7) | (1.4) | ||||||||||||||
| Decrease for settlement with tax authorities | — | (2.9) | — | ||||||||||||||
| Reductions for tax positions of prior years | (7.2) | (4.1) | (17.4) | ||||||||||||||
| Balance at December 31 | $ | 17.0 | $ | 18.3 | $ | 25.5 | |||||||||||
No assurance can be given that any of these unrecognized tax benefits will be recognized or realized.
As of December 31, 2025, all of our unrecognized tax benefits would have a favorable impact on our effective income tax rate if ultimately recognized.
During 2026, it is reasonably possible that the resolution of ongoing examinations by tax authorities as well as expiration of statutes of limitation could result in reductions to our unrecognized tax benefits related to tax positions taken as of December 31, 2025. Other than the potential impacts of ongoing examinations and the expected expiration of certain statutes of limitation, we do not expect any material changes to our unrecognized tax benefits during 2026. No assurance can be given as to the nature or impact of any changes in our unrecognized tax positions during 2026.
During 2025, 2024 and 2023, our income tax benefit (expense) includes interest expense (income) of $4 million, ($3 million) and $12 million, respectively, representing the net accrual of interest and penalties incurred during the respective period. Our other long-term liabilities include accrued interest and penalties of $26 million and $22 million at December 31, 2025 and 2024, respectively.
Cash taxes paid (refunded) for the year ended December 31, 2025 are as set forth below (in millions):
| Bermuda federal | * | ||||
| Bermuda state and local | * | ||||
| Foreign: | |||||
| Costa Rica | $ | 43.6 | |||
| Jamaica | 12.9 | ||||
| Panama | 14.3 | ||||
| United Kingdom | (9.8) | ||||
| United States | 46.9 | ||||
| Other | 51.5 | ||||
| Total | $ | 159.4 | |||
* The amount of income taxes paid during the year does not meet the 5% disaggregation threshold.
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.