MOSAIC COMOS
MOSAIC CO Income Taxes Disclosure
INCOME TAXES
In preparing our Consolidated Financial Statements, we utilize the asset and liability approach in accounting for income taxes. We recognize income taxes in each of the jurisdictions in which we have a presence. For each jurisdiction, we estimate the actual amount of income taxes currently payable or receivable, as well as deferred income tax assets and liabilities attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which these temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
Income (loss) before income taxes for 2025, 2024 and 2023 consisted of the following:
| Years Ended December 31, | |||||||||||||||||
| (in millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Domestic earnings | $ | 159.5 | $ | (557.8) | $ | 121.6 | |||||||||||
| Foreign earnings | 1,053.4 | 873.2 | 1,204.3 | ||||||||||||||
| Earnings (loss) from consolidated companies before income taxes | $ | 1,212.9 | $ | 315.4 | $ | 1,325.9 | |||||||||||
The provision for income taxes for 2025, 2024 and 2023 consisted of the following:
| Years Ended December 31, | |||||||||||||||||
| (in millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Current: | |||||||||||||||||
| Federal | $ | 42.1 | $ | (11.7) | $ | 86.4 | |||||||||||
| State | 3.3 | 10.7 | 1.5 | ||||||||||||||
| Non-U.S. | 331.5 | 339.2 | 357.4 | ||||||||||||||
| Total current | 376.9 | 338.2 | 445.3 | ||||||||||||||
| Noncurrent: | |||||||||||||||||
| Federal | $ | (1.9) | $ | (0.1) | $ | 0.3 | |||||||||||
| State | 9.4 | — | — | ||||||||||||||
| Non-U.S. | (1.8) | (10.8) | (3.0) | ||||||||||||||
| Total noncurrent | 5.7 | (10.9) | (2.7) | ||||||||||||||
| Deferred: | |||||||||||||||||
| Federal | $ | (1.4) | $ | (41.7) | $ | (35.4) | |||||||||||
| State | 7.5 | (29.0) | (4.2) | ||||||||||||||
| Non-U.S. | 251.1 | (69.9) | (226.0) | ||||||||||||||
| Total deferred | 257.2 | (140.6) | (265.6) | ||||||||||||||
| Total: | |||||||||||||||||
| Federal | $ | 38.8 | $ | (53.5) | $ | 51.3 | |||||||||||
| State | 20.2 | (18.3) | (2.7) | ||||||||||||||
| Non-U.S. | 580.8 | 258.5 | 128.4 | ||||||||||||||
| Provision for income taxes | $ | 639.8 | $ | 186.7 | $ | 177.0 | |||||||||||
The table below provides the updated requirements of ASU 2023-09 for 2025. The effects of significant adjustments to tax computed at the federal statutory rate were as follows:
| Years Ended December 31, 2025 | |||||||||||
| (in millions) | Amount | Percent | |||||||||
| Computed tax at the U.S. federal statutory rate | $ | 254.7 | 21.0 | % | |||||||
State and local income taxes, net of federal income tax effect(1) | 14.5 | 1.2 | % | ||||||||
| Effect of changes in tax laws or rates enacted in the current period | — | — | % | ||||||||
| Effect of cross-border tax laws | |||||||||||
| U.S. tax on Canadian branches, net of credits | (95.5) | (7.9) | % | ||||||||
| Global Intangible Low-Taxed Income, net of credits | 42.3 | 3.5 | % | ||||||||
| Other | 23.1 | 1.9 | % | ||||||||
| Tax credits | |||||||||||
| U.S. general basket foreign tax credits | (45.4) | (3.7) | % | ||||||||
| Other | (7.3) | (0.6) | % | ||||||||
| Changes in valuation allowances | 101.8 | 8.4 | % | ||||||||
| Nontaxable or nondeductible items | |||||||||||
| Percentage depletion in excess of basis | (20.5) | (1.7) | % | ||||||||
| Corporate expenses paid on behalf of foreign subsidiaries | 15.5 | 1.3 | % | ||||||||
| Other | 10.7 | 0.9 | % | ||||||||
| Foreign tax effects | |||||||||||
| Brazil | |||||||||||
| Book loss on sale of the Taquari mine | 22.3 | 1.8 | % | ||||||||
| Changes in valuation allowances | 207.3 | 17.1 | % | ||||||||
| Other | 53.7 | 4.4 | % | ||||||||
| Withholding tax on interest | 18.7 | 1.5 | % | ||||||||
| Canada | |||||||||||
| Statutory tax rate difference between Canada and U.S. | (40.1) | (3.3) | % | ||||||||
| Provincial taxes | 68.1 | 5.6 | % | ||||||||
| Other | (14.7) | (1.2) | % | ||||||||
| Withholding tax on dividends | 14.1 | 1.2 | % | ||||||||
| Peru | |||||||||||
| Statutory tax rate difference between Peru and U.S. | 14.3 | 1.2 | % | ||||||||
| Other | 15.4 | 1.3 | % | ||||||||
| Other foreign jurisdictions | 7.7 | 0.6 | % | ||||||||
| Worldwide changes in unrecognized tax benefits | (3.1) | (0.3) | % | ||||||||
| Other Adjustments | |||||||||||
| Domestic federal | |||||||||||
| Estimated loss on sale of Carlsbad | (24.3) | (2.0) | % | ||||||||
| Other | 6.5 | 0.5 | % | ||||||||
| Effective tax rate | $ | 639.8 | 52.7 | % | |||||||
(1)State taxes in Minnesota made up the majority (greater than 50 percent) of the tax effect in this category.
As previously disclosed for the years ended December 31, 2024 and 2023, prior to the adoption of ASU 2023-09, the effects of significant adjustments to tax computed at the federal statutory rate, were as follows:
| Years Ended December 31, | |||||||||||
| (in millions) | 2024 | 2023 | |||||||||
| Computed tax at the U.S. federal statutory rate | 21.0 | % | 21.0 | % | |||||||
| State and local income taxes, net of federal income tax benefit | (5.7) | % | 0.4 | % | |||||||
| Percentage depletion in excess of basis | (13.8) | % | (4.9) | % | |||||||
| Impact of non-U.S. earnings | 23.8 | % | 8.7 | % | |||||||
| Change in valuation allowance | 13.0 | % | (1.7) | % | |||||||
| Non-U.S. incentives | (42.6) | % | (11.5) | % | |||||||
| Withholding tax | 13.6 | % | 6.3 | % | |||||||
| U.S. general basket foreign tax credits | (12.6) | % | (4.0) | % | |||||||
| Tax legislation change impacts | (5.7) | % | (1.6) | % | |||||||
| Undistributed earnings | 33.0 | % | 2.2 | % | |||||||
| Tax on dividends, deemed dividends, and GILTI | 16.2 | % | 0.7 | % | |||||||
| Nondeductible expenses | 20.0 | % | 0.2 | % | |||||||
| Other items (none in excess of 5% of computed tax) | (1.0) | % | (2.5) | % | |||||||
| Effective tax rate | 59.2 | % | 13.3 | % | |||||||
2025 Effective Tax Rate
In the year ended December 31, 2025, there were two items impacting the effective tax rate: 1) items attributable to ordinary business operations during the year, and 2) other items specific to the period.
The tax impact of our ordinary business operations is affected by the mix of earnings across jurisdictions in which we operate, by a benefit associated with depletion, changes in valuation allowances and by the impact of certain entities being taxed in both their foreign jurisdiction and the U.S., including foreign tax credits for various taxes incurred.
For the year ended December 31, 2025, tax expense specific to the period included a net expense of $189.3 million. The net expense relates to the following: $212.1 million primarily related to changes to valuation allowances in Brazil, $6.4 million related to share-based excess benefit, $23.3 million related to adjustments to accrued foreign tax credits, and $4.0 million related to other miscellaneous expenses. The tax expenses are partially offset by a net tax benefit related to the tax effects of one-time notable items booked as discrete of $54.2 million, and the true-up of estimates from our U.S. and non-U.S. tax return provisions of $2.3 million.
2024 Effective Tax Rate
In the year ended December 31, 2024, there were two items impacting the effective tax rate: 1) items attributable to ordinary business operations during the year, and 2) other items specific to the period.
The tax impact of our ordinary business operations is affected by the mix of earnings across jurisdictions in which we operate, by a benefit associated with depletion, changes in valuation allowances and by the impact of certain entities being taxed in both their foreign jurisdiction and the U.S., including foreign tax credits for various taxes incurred.
For the year ended December 31, 2024, tax expense specific to the period included a net expense of $125.9 million. The net expense relates to the following: $99.9 million related to the impact of accruing withholding tax expense on expected foreign distributions associated with changes in management’s indefinite reinvestment assertion on select foreign earnings under ASC 740-30 (formerly APB 23), $7.1 million related to true-up of estimates from our U.S. and non-U.S. tax return provisions, $24.2 million related to changes to valuation allowances in Brazil, the Netherlands and the U.S., $4.0 million related to share-based excess benefit, $2.5 million related to changes in tax rates and $6.2 million related to other miscellaneous expenses. The tax expenses are partially offset by a net tax benefit related to changes in U.S. state tax law of $18.1 million.
2023 Effective Tax Rate
In the year ended December 31, 2023, there were two items impacting the effective tax rate: 1) items attributable to ordinary business operations during the year, and 2) other items specific to the period.
The tax impact of our ordinary business operations is affected by the mix of earnings across jurisdictions in which we operate, by a benefit associated with depletion, by a benefit associated with non-U.S. incentives, changes in valuation allowances, and by the impact of certain entities being taxed in both their foreign jurisdiction and the U.S., including foreign tax credits for various taxes incurred.
Tax expense specific to the period included a net benefit of $43.4 million. The net benefit relates to the following: $38.1 million related to true-up of estimates primarily related to our U.S. tax return, $24.4 million related to changes to valuation allowances in Brazil, and $11.6 million related to an increase in a U.S. deferred tax asset. The tax benefits are partially offset by a net tax cost of $29.3 million related to income tax expense on undistributed earnings and $1.4 million of other miscellaneous costs.
Net cash paid (refunds received) for income taxes consisted of the following:
| Years Ended December 31, | |||||||||||||||||
(in millions) | 2025 | 2024 | 2023 | ||||||||||||||
U.S. federal | $ | (10.8) | $ | — | $ | — | |||||||||||
U.S. state and local | 7.0 | — | — | ||||||||||||||
Foreign | |||||||||||||||||
| Canada federal | 148.7 | — | — | ||||||||||||||
| Saskatchewan | 80.5 | — | — | ||||||||||||||
Canada other provincial | 4.3 | — | — | ||||||||||||||
Peru | 53.7 | — | — | ||||||||||||||
Brazil | 19.5 | — | — | ||||||||||||||
Other | 18.4 | — | — | ||||||||||||||
Cash paid (refunds received) for income taxes (prior to ASU 2023-09) | — | 337.0 | 385.6 | ||||||||||||||
Net cash paid (refunds received) for income taxes | $ | 321.3 | $ | 337.0 | $ | 385.6 | |||||||||||
Deferred Tax Liabilities and Assets
Significant components of our deferred tax liabilities and assets were as follows as of December 31:
| December 31, | |||||||||||
| (in millions) | 2025 | 2024 | |||||||||
| Deferred tax liabilities: | |||||||||||
| Depreciation and amortization | $ | 601.9 | $ | 614.5 | |||||||
| Depletion | 593.5 | 573.4 | |||||||||
| Partnership tax basis differences | 63.5 | 80.6 | |||||||||
| Undistributed earnings of non-U.S. subsidiaries | 47.4 | 84.4 | |||||||||
| Other liabilities | 61.8 | 78.6 | |||||||||
| Total deferred tax liabilities | $ | 1,368.1 | $ | 1,431.5 | |||||||
| Deferred tax assets: | |||||||||||
| Capital loss carryforwards | 12.3 | 15.0 | |||||||||
| Foreign tax credit carryforwards | 1,553.2 | 1,431.8 | |||||||||
| Net operating loss carryforwards | 479.8 | 450.6 | |||||||||
| Pension plans and other benefits | 17.7 | 13.9 | |||||||||
| Asset retirement obligations | 538.2 | 547.4 | |||||||||
| Disallowed interest expense under §163(j) | 24.7 | 20.3 | |||||||||
| Other assets | 418.9 | 497.3 | |||||||||
| Subtotal | 3,044.8 | 2,976.3 | |||||||||
| Valuation allowance | 1,866.0 | 1,529.3 | |||||||||
| Net deferred tax assets | 1,178.8 | 1,447.0 | |||||||||
| Net deferred tax assets/(liabilities) | $ | (189.3) | $ | 15.5 | |||||||
We have certain non-U.S. entities that are taxed in both their local jurisdiction and the U.S. As a result, we have deferred tax balances for both jurisdictions. As of December 31, 2025 and 2024, these non-U.S. deferred taxes are offset by approximately $202.5 million and $199.6 million, respectively, of anticipated foreign tax credits included within our depreciation and depletion components of deferred tax liabilities above. We have recorded a valuation allowance against the anticipated foreign tax credits of $202.5 million and $199.6 million for December 31, 2025 and 2024, respectively.
Tax Carryforwards
As of December 31, 2025, we had estimated carryforwards for tax purposes as follows: net operating losses of $1.8 billion, capital losses of $51.9 million, foreign tax credits of $1.6 billion and $3.6 million of non-U.S. business credits. These carryforward benefits may be subject to limitations imposed by the Internal Revenue Code, and in certain cases, provisions of foreign law. Approximately $1.2 billion of our net operating loss carryforwards relate to Brazil and can be carried forward indefinitely but are limited to 30 percent of taxable income each year. The Company established a valuation allowance against a portion of Brazil’s net operating loss carryforwards and other deferred tax assets of $261 million as of December 31, 2025 based on the likelihood that the net operating losses will not be used in the future. The majority of the remaining net operating loss carryforwards relate to U.S. federal and certain U.S. states and can be carried forward indefinitely. Of the $1.6 billion of foreign tax credits, approximately $320.8 million relates to general basket foreign tax credits of which $228.1 million have an expiration date of 2026, approximately $16.2 million have an expiration date of 2029, approximately $14.7 million have an expiration date of 2030, approximately $31.1 million have an expiration date of 2034, and approximately $30.7 million have an expiration date of 2035. The realization of our foreign tax credit carryforwards is dependent on market conditions, tax law changes and other business outcomes including our ability to generate certain types of taxable income in the future. Due to current business operations and future forecasts, the Company has determined that no valuation allowance is required on its general basket foreign tax credits. As a result of changes in U.S. tax law due to the Tax Cuts and Jobs Act, the Company recorded valuation allowances against its branch basket foreign tax credits of $1.2 billion as of December 31, 2025.
As of December 31, 2025, we have not recognized a deferred tax liability for un-remitted earnings from certain foreign operations because we believe our subsidiaries have invested the undistributed earnings indefinitely, or the earnings will be remitted in a tax-neutral transaction. It is not practicable for us to determine the amount of unrecognized deferred tax liability on these reinvested earnings. As part of the accounting for the Tax Cuts and Jobs Act, we recorded local country withholding taxes related to certain entities from which we began repatriating undistributed earnings and will continue to record local country withholding taxes, including foreign exchange impacts, on all future earnings.
Valuation Allowance
In assessing the need for a valuation allowance, we consider whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. We evaluate our ability to realize the tax benefits associated with deferred tax assets by analyzing the relative impact of all the available positive and negative evidence regarding our forecasted taxable income using both historical and projected future operating results, the reversal of existing taxable temporary differences, taxable income in prior carry-back years (if permitted) and the availability of tax planning strategies. The ultimate realization of deferred tax assets is dependent upon the generation of certain types of future taxable income during the periods in which those temporary differences become deductible. In making this assessment, we consider the scheduled reversal of deferred tax liabilities, our ability to carry back the deferred tax asset, projected future taxable income, and tax planning strategies. A valuation allowance will be recorded in each jurisdiction in which a deferred income tax asset is recorded when it is more likely than not that the deferred income tax asset will not be realized. Changes in deferred tax asset valuation allowances typically impact income tax expense.
For the year ended December 31, 2025, the valuation allowance increased by $336.7 million, of which a $110.8 million increase related to changes in the valuation allowance to U.S. branch foreign tax credits, $229.6 million related to changes in valuation allowances and currency translation in Brazil and a $5.3 million increase related to changes in valuation allowances in Peru. These increases to the valuation allowance were partially offset by a decrease of $1.5 million related to changes in the valuation allowance to U.S. state net operating losses and tax credits, $6.0 million related to changes in valuation allowances in Canada and $1.5 million related to changes in valuation allowances in other foreign jurisdictions.
For the year ended December 31, 2024, the valuation allowance increased by $107.4 million, of which a $105.4 million increase related to changes in the valuation allowance to U.S. branch foreign tax credits, $11.3 million related to changes in the valuation allowance to U.S. state net operating losses and tax credits and a $2.8 million increase related to changes in valuation allowances in Canada. These increases to the valuation allowance were partially offset by a decrease of $9.0 million related to changes in valuation allowances and currency translation in Brazil and $3.1 million changes in valuation allowances in other foreign jurisdictions.
For the year ended December 31, 2023, the valuation allowance increased by $512.0 million, of which a $531.0 million increase related to changes in the valuation allowance to U.S. branch foreign tax credits, and a $0.2 million increase related to changes in valuation allowances in other foreign jurisdictions. These increases to the valuation allowance were partially offset by a decrease of $12.7 million related to changes in valuation allowances and currency translation in Brazil and $6.5 million changes in valuation allowances in other foreign jurisdictions.
Changes to our income tax valuation allowance were as follows:
| Years Ended December 31, | |||||||||||||||||
| (in millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Income tax valuation allowance, related to deferred income taxes | |||||||||||||||||
| Balance at beginning of period | $ | 1,529.3 | $ | 1,421.9 | $ | 909.9 | |||||||||||
| Charges or (reductions) to costs and expenses | 336.7 | 107.4 | 512.0 | ||||||||||||||
| Balance at end of period | $ | 1,866.0 | $ | 1,529.3 | $ | 1,421.9 | |||||||||||
Uncertain Tax Positions
Accounting for uncertain income tax positions is determined by prescribing a minimum probability threshold that a tax position must meet before a financial statement benefit is recognized. This minimum threshold is that a tax position is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related
appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized is measured as the largest amount of benefit that is greater than a fifty percent likelihood of being realized upon ultimate settlement.
During 2025, gross unrecognized tax benefits increased to $1.4 billion. The increase is primarily related to establishing an unrecognized tax benefit on a potential tax loss in the U.S. associated with the expected divestiture of the Taquari mine that was acquired as part of the Vale acquisition. In December, the Company applied to the Internal Revenue Services’ Pre-Filing Agreement Program to evaluate the amount and nature of the loss. If recognized, approximately $1.4 billion in unrecognized tax benefits would affect our effective tax rate, other deferred tax assets, and net earnings in future periods.
A summary of gross unrecognized tax benefit activity is as follows:
| Years Ended December 31, | |||||||||||||||||
| (in millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Gross unrecognized tax benefits, beginning of period | $ | 14.2 | $ | 25.8 | $ | 25.2 | |||||||||||
| Gross increases: | |||||||||||||||||
| Prior period tax positions | — | — | 0.9 | ||||||||||||||
| Current period tax positions | 1,401.1 | 1.6 | 3.0 | ||||||||||||||
| Gross decreases: | |||||||||||||||||
| Prior period tax positions | (2.3) | (11.5) | (3.8) | ||||||||||||||
| Currency translation | 0.5 | (1.7) | 0.5 | ||||||||||||||
| Gross unrecognized tax benefits, end of period | $ | 1,413.5 | $ | 14.2 | $ | 25.8 | |||||||||||
We recognize interest and penalties related to unrecognized tax benefits as a component of our income tax expense. Interest and penalties accrued in our Consolidated Balance Sheets as of December 31, 2025 and 2024 were $6.0 million and $5.4 million, respectively, and are included in other noncurrent liabilities in the Consolidated Balance Sheets.
Open Tax Periods
We operate in multiple tax jurisdictions, both within the U.S. and outside the U.S., and face audits from various tax authorities regarding transfer pricing, deductibility of certain expenses and intercompany transactions, as well as other matters. With few exceptions, we are no longer subject to examination for tax years prior to 2022.
Mosaic is continually under audit by various tax authorities in the normal course of business. Such tax authorities may raise issues contrary to positions taken by the Company. If such positions are ultimately not sustained by the Company, this could result in material assessments to the Company. The costs related to defending, if needed, such positions on appeal or in court may be material. The Company believes that any issues considered are properly accounted for.
We are currently under audit by the Internal Revenue Service for the tax years ended December 31, 2022 and December 31, 2023. Based on the information available, we do not anticipate significant changes to our unrecognized tax benefits as a result of these examinations other than the amounts discussed above.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 27, 2026 | Showing above |
| 2024 | Mar 3, 2025 | |
| 2023 | Feb 22, 2024 | |
| 2022 | Feb 23, 2023 | |
| 2021 | Feb 23, 2022 | |
| 2020 | Feb 22, 2021 | |
| 2019 | Feb 20, 2020 | |
| 2018 | Mar 13, 2019 | |
| 2017 | Feb 21, 2018 | |
| 2016 | Feb 15, 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.