Mondelez International, Inc.MDLZ
Mondelez International, Inc. Income Taxes Disclosure
Note 16. Income Taxes
Earnings/(losses) from continuing operations before income taxes and the provision for income taxes consisted of:
| For the Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in millions) | |||||||||||||||||
| Earnings/(losses) from continuing operations before income taxes: | |||||||||||||||||
| United States | $ | 750 | $ | 1,688 | $ | 1,500 | |||||||||||
| Outside United States | 2,264 | 4,573 | 4,380 | ||||||||||||||
| $ | 3,014 | $ | 6,261 | $ | 5,880 | ||||||||||||
| Provision for income taxes: | |||||||||||||||||
| United States federal: | |||||||||||||||||
| Current | $ | 102 | $ | 268 | $ | 667 | |||||||||||
| Deferred | 54 | 98 | (167) | ||||||||||||||
| 156 | 366 | 500 | |||||||||||||||
| State and local: | |||||||||||||||||
| Current | (3) | 83 | 123 | ||||||||||||||
| Deferred | 8 | 28 | (50) | ||||||||||||||
| 5 | 111 | 73 | |||||||||||||||
| Total United States | 161 | 477 | 573 | ||||||||||||||
| Outside United States: | |||||||||||||||||
| Current | 667 | 861 | 784 | ||||||||||||||
| Deferred | (46) | 131 | 180 | ||||||||||||||
| Total outside United States | 621 | 992 | 964 | ||||||||||||||
| Total provision for income taxes | $ | 782 | $ | 1,469 | $ | 1,537 | |||||||||||
The effective income tax rate on pre-tax earnings differed from the U.S. federal statutory rate as follows:
For the Year Ended December 31, | |||||||||||
| 2025 | |||||||||||
| (in millions) | |||||||||||
| U.S. federal statutory rate | $ | 633 | 21.0 | % | |||||||
State and local income taxes, net of federal tax effect | 37 | 1.2 | % | ||||||||
| Foreign tax effects: | |||||||||||
| Brazil: | |||||||||||
| Nontaxable or nondeductible items | (34) | (1.1) | % | ||||||||
| Other - Brazil | 10 | 0.3 | % | ||||||||
| China | 55 | 1.8 | % | ||||||||
| Germany: | |||||||||||
| Nontaxable or nondeductible items | (44) | (1.5) | % | ||||||||
| Other - Germany | 7 | 0.2 | % | ||||||||
| Russia: | |||||||||||
| Cross-border tax laws - withholding tax | 33 | 1.1 | % | ||||||||
| Other - Russia | 24 | 0.8 | % | ||||||||
| Singapore | (37) | (1.2) | % | ||||||||
| Switzerland: | |||||||||||
| Changes in valuation allowances | 45 | 1.5 | % | ||||||||
| Other - Switzerland | (44) | (1.5) | % | ||||||||
| Other foreign jurisdictions | 162 | 5.4 | % | ||||||||
| Effects of changes in tax laws or rates enacted in the current period | — | — | % | ||||||||
| Effects of cross-border tax laws (net of foreign tax credits): | |||||||||||
| Global intangible low-taxed income | 57 | 1.9 | % | ||||||||
| Other | (64) | (2.1) | % | ||||||||
| Tax credits | (17) | (0.6) | % | ||||||||
| Changes in valuation allowances | 35 | 1.2 | % | ||||||||
| Nontaxable or nondeductible items | 10 | 0.3 | % | ||||||||
| Changes in unrecognized tax benefits | (88) | (2.9) | % | ||||||||
| Other | 2 | 0.1 | % | ||||||||
| Effective tax rate | $ | 782 | 25.9 | % | |||||||
The following states make up more than 50% of state income tax expense: California, Illinois, Texas, New Jersey and Pennsylvania.
| For the Years Ended December 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| U.S. federal statutory rate | 21.0% | 21.0% | |||||||||
| Increase/(decrease) resulting from: | |||||||||||
| State and local income taxes, net of federal tax benefit | 1.2% | (0.1)% | |||||||||
Foreign rate differences | 3.0% | 2.0% | |||||||||
| Changes in judgment on realizability of deferred tax assets | (0.2)% | (0.1)% | |||||||||
Net change in tax accruals | 0.5% | (0.2)% | |||||||||
Tax accrual on investment in KDP (including tax impact of share sales) | —% | 2.8% | |||||||||
| Excess tax benefits from equity compensation | (0.4)% | (0.4)% | |||||||||
| Tax legislation | 0.2% | 1.4% | |||||||||
Business sales | —% | (0.5)% | |||||||||
Tax benefit from legal entity reorganization | (2.3)% | —% | |||||||||
Foreign tax provisions under TCJA (GILTI, FDII and BEAT) (1) | 0.5% | 0.6% | |||||||||
Tax impacts from the European Commission legal matter | —% | (0.4)% | |||||||||
| Effective tax rate | 23.5% | 26.1% | |||||||||
(1)The Tax Cuts and Jobs Act of 2017 (“TCJA”) established the Global Intangible Low-Tax Income (“GILTI”) provision, which taxes U.S. allocated expenses and certain income from foreign operations; the Foreign-Derived Intangible Income (“FDII”) provision, which allows a deduction against certain types of U.S. taxable income resulting in a lower effective U.S. tax rate on such income; and the Base Erosion Anti-abuse Tax (“BEAT”), which is a minimum tax based on cross-border service payments by U.S. entities.
Our 2025 effective tax rate was 25.9%, higher than the 21% U.S. federal statutory rate due to the net unfavorable impacts of our jurisdictional mix of pretax income, foreign provisions under U.S. tax laws and a net increase to valuation allowances. This was partially offset by favorable tax benefits related to audit settlements, final 2024 tax return filings and the tax treatment of certain foreign pension assets.
Our 2024 effective tax rate of 23.5% was higher than the 21% U.S. federal statutory rate due to the net unfavorable impact attributable to our jurisdictional mix of pretax income and applicable tax rates as well as unfavorable foreign provisions under U.S. tax laws, partially offset by a net benefit resulting from a legal entity reorganization associated with a prior year acquisition.
Our 2023 effective tax rate of 26.1% was higher than the 21% U.S. federal statutory rate due to a $125 million net tax expense incurred in connection with the KDP share sale during the first quarter of 2023 (the earnings were reported separately on our statement of earnings and thus not included in earnings before income taxes). Excluding these impacts, our effective tax rate was 24.0%, which reflects unfavorable foreign provisions under U.S. tax laws as well as net unfavorable impacts from the mix of pretax income and applicable tax rates in various non-U.S. jurisdictions. The 24.0% included a $150 million net tax expense related to pretax gains and losses on KDP marketable securities. It also included a favorable discrete net tax benefit of $40 million, driven primarily by a $51 million net benefit from the release of liabilities for uncertain tax positions due to expirations of statutes of limitations and audit settlements in several jurisdictions and a $24 million benefit for the expected tax deduction on the European Commission legal matter, partially offset by a $63 million expense from updating our Swiss tax reform position in Switzerland as it relates to the 2024 tax year.
Cash taxes paid, net of refunds, were as follows:
For the Year Ended December 31, | ||||||||
| 2025 | ||||||||
| (in millions) | ||||||||
| U.S. Federal | $ | 338 | ||||||
| U.S. State | 45 | |||||||
| Total U.S. | 383 | |||||||
| Foreign: | ||||||||
China | 91 | |||||||
Russia | 69 | |||||||
Switzerland | 63 | |||||||
| Other foreign | 468 | |||||||
| Total foreign | 691 | |||||||
Total | $ | 1,074 | ||||||
Tax effects of temporary differences that gave rise to deferred income tax assets and liabilities consisted of:
| As of December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (in millions) | |||||||||||
| Deferred income tax assets: | |||||||||||
| Accrued postretirement and postemployment benefits | $ | 44 | $ | 50 | |||||||
| Other employee benefits | 168 | 154 | |||||||||
| Accrued expenses | 629 | 647 | |||||||||
| Loss carryforwards | 752 | 681 | |||||||||
| Tax credit carryforwards | 773 | 736 | |||||||||
| Other | 763 | 527 | |||||||||
| Total deferred income tax assets | 3,129 | 2,795 | |||||||||
| Valuation allowance | (1,448) | (1,291) | |||||||||
| Net deferred income tax assets | $ | 1,681 | $ | 1,504 | |||||||
| Deferred income tax liabilities: | |||||||||||
Intangible assets | $ | (3,310) | $ | (3,083) | |||||||
| Property, plant and equipment | (875) | (777) | |||||||||
| Accrued pension costs | (10) | (74) | |||||||||
| Other | (680) | (662) | |||||||||
| Total deferred income tax liabilities | (4,875) | (4,596) | |||||||||
| Net deferred income tax liabilities | $ | (3,194) | $ | (3,092) | |||||||
Our significant valuation allowances are in the U.S. and Switzerland. The U.S. valuation allowance relates to excess foreign tax credits generated by the deemed repatriation under U.S. tax reform while the Swiss valuation allowance reduces the deferred tax asset related to amortizable intangible assets to the amount more likely than not to be realized. Our total valuation allowance was $1,291 million as of January 1, 2025 and $1,448 million as of December 31, 2025. The $157 million net change, which includes currency impacts, consisted of $193 million additions less $36 million reductions.
At December 31, 2025, the Company has tax-effected loss carryforwards of $752 million, of which $31 million will expire at various dates between 2026 and 2045 and the remaining $721 million can be carried forward indefinitely.
As of December 31, 2025, the company is indefinitely reinvested in certain unremitted earnings that have already been subject to U.S. tax; these earnings would incur approximately $125 million of local tax if repatriated, which has not been recognized in our consolidated financial statements.
The changes in our unrecognized tax benefits were:
| For the Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in millions) | |||||||||||||||||
| January 1 | $ | 436 | $ | 442 | $ | 424 | |||||||||||
| Increases from positions taken during prior periods | 37 | 25 | 33 | ||||||||||||||
| Decreases from positions taken during prior periods | (54) | (7) | (35) | ||||||||||||||
| Increases from positions taken during the current period | 27 | 40 | 55 | ||||||||||||||
| Decreases relating to settlements with taxing authorities | (58) | (20) | (11) | ||||||||||||||
Reductions resulting from the lapse of the applicable statute of limitations | (14) | (20) | (29) | ||||||||||||||
| Currency/other | 26 | (24) | 5 | ||||||||||||||
| December 31 | $ | 400 | $ | 436 | $ | 442 | |||||||||||
As of January 1, 2025, our unrecognized tax benefits were $436 million. If we had recognized all of these benefits, the net impact on our income tax provision would have been $348 million. Our unrecognized tax benefits were $400 million at December 31, 2025, and if we had recognized all of these benefits, the net impact on our income tax provision would have been $326 million. We include accrued interest and penalties related to uncertain tax positions in our tax provision. We had accrued interest and penalties of $190 million as of January 1, 2025 and $191 million as of December 31, 2025. Our 2025 provision for income taxes included $8 million benefit for interest and penalties.
In connection with the 2017 enacted U.S. tax reform, we recorded a $1.3 billion transition tax liability that is payable in installments through 2026. As of December 31, 2025, the remaining liability was approximately $90 million.
Our income tax filings are regularly examined by federal, state and non-U.S. tax authorities. U.S. federal, state and non-U.S. jurisdictions have statutes of limitations generally ranging from three to five years; however, these statutes are often extended by mutual agreement with the tax authorities. The earliest year still open to examination by U.S. federal and state tax authorities is 2016 and the years still open to examination by non-U.S. tax authorities in major jurisdictions include (earliest open tax year in parentheses): India (2005), Switzerland (2019), China (2015) and Greece (2018).
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 4, 2026 | Showing above |
| 2024 | Feb 5, 2025 | |
| 2023 | Feb 2, 2024 | |
| 2022 | Feb 3, 2023 | |
| 2021 | Feb 4, 2022 | |
| 2020 | Feb 5, 2021 | |
| 2019 | Feb 7, 2020 | |
| 2018 | Feb 8, 2019 | |
| 2017 | Feb 9, 2018 | |
| 2016 | Feb 24, 2017 | |
| 2015 | Feb 19, 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.