Tronox Holdings plcTROX
Tronox Holdings plc Income Taxes Disclosure
Income Taxes
Our operations are conducted through various subsidiaries in a number of countries throughout the world. We have provided for income taxes based upon the tax laws and rates in the countries in which operations are conducted and income is earned.
(Loss) income before income taxes is comprised of the following:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| United Kingdom | $ | (46) | $ | (35) | $ | (47) | |||||||||||
| International | (412) | 108 | 96 | ||||||||||||||
| (Loss) Income before income taxes | $ | (458) | $ | 73 | $ | 49 | |||||||||||
The income tax provision is summarized below:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| United Kingdom: | |||||||||||||||||
| Current | $ | — | $ | — | $ | 1 | |||||||||||
| Deferred | — | — | — | ||||||||||||||
| International: | |||||||||||||||||
| Current | (3) | (17) | (34) | ||||||||||||||
| Deferred | (12) | (110) | (330) | ||||||||||||||
| Income tax provision | $ | (15) | $ | (127) | $ | (363) | |||||||||||
The following table reconciles the applicable statutory income tax rates to our effective income tax rates for “Income tax provision” as reflected in the Consolidated Statements of Operations.
| Year Ended December 31, | |||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||
| $ | % | $ | % | $ | % | ||||||||||||||||||||||||||||||
| Statutory tax rate - United Kingdom | $ | 114 | 25 | % | $ | (18) | 25 | % | $ | (12) | 24 | % | |||||||||||||||||||||||
| Foreign tax effects | |||||||||||||||||||||||||||||||||||
| Australia | |||||||||||||||||||||||||||||||||||
| Nondeductible debt costs | (38) | (8) | % | (14) | 19 | % | (12) | 24 | % | ||||||||||||||||||||||||||
| Prior period accrual - nondeductible debt costs | (20) | (5) | % | — | — | % | (1) | 2 | % | ||||||||||||||||||||||||||
| Tax rates different than statutory | 11 | 2 | % | 9 | (13) | % | 12 | (24) | % | ||||||||||||||||||||||||||
| Other adjustments | — | — | % | — | — | % | 2 | (4) | % | ||||||||||||||||||||||||||
| Changes in valuation allowances | (5) | (1) | % | (38) | 52 | % | (341) | 697 | % | ||||||||||||||||||||||||||
| Brazil | |||||||||||||||||||||||||||||||||||
| Other adjustments | 1 | — | % | 2 | (3) | % | — | — | % | ||||||||||||||||||||||||||
| Changes in valuation allowances | (4) | (1) | % | (20) | 28 | % | — | — | % | ||||||||||||||||||||||||||
| Canada | |||||||||||||||||||||||||||||||||||
| Gain on sale of royalty interest | — | — | % | (7) | 10 | % | — | — | % | ||||||||||||||||||||||||||
| China | |||||||||||||||||||||||||||||||||||
| Changes in valuation allowances | (18) | (4) | % | (1) | 1 | % | (1) | 2 | % | ||||||||||||||||||||||||||
| The Netherlands | |||||||||||||||||||||||||||||||||||
| Other adjustments | 1 | — | % | — | — | % | 1 | (2) | % | ||||||||||||||||||||||||||
| Changes in valuation allowances | (41) | (9) | % | (34) | 46 | % | — | — | % | ||||||||||||||||||||||||||
| South Africa | |||||||||||||||||||||||||||||||||||
| Tax rates different than statutory | — | — | % | (3) | 4 | % | (5) | 10 | % | ||||||||||||||||||||||||||
| Other adjustments | (2) | — | % | — | — | % | 1 | (2) | % | ||||||||||||||||||||||||||
| Switzerland | |||||||||||||||||||||||||||||||||||
| Expiration of carryover losses | — | — | % | — | — | % | (6) | 12 | % | ||||||||||||||||||||||||||
| Changes in valuation allowances | — | — | % | — | — | % | 6 | (12) | % | ||||||||||||||||||||||||||
| Other adjustments | — | — | % | — | 1 | (2) | % | ||||||||||||||||||||||||||||
| United States | |||||||||||||||||||||||||||||||||||
| Transfer pricing adjustment | — | — | % | — | — | % | (4) | 8 | % | ||||||||||||||||||||||||||
| State and local taxes | (2) | — | % | (3) | 4 | % | (8) | 16 | % | ||||||||||||||||||||||||||
| Tax rates different than statutory | — | — | % | 6 | (8) | % | 4 | (8) | % | ||||||||||||||||||||||||||
| Other adjustments | (2) | — | % | — | — | % | 1 | (2) | % | ||||||||||||||||||||||||||
| Changes in valuation allowances | 2 | — | % | 2 | (3) | % | 9 | (18) | % | ||||||||||||||||||||||||||
| Other foreign jurisdictions | (1) | — | % | 1 | (1) | % | — | — | % | ||||||||||||||||||||||||||
| Effect of changes in tax laws or rates | — | — | % | — | — | % | 2 | (4) | % | ||||||||||||||||||||||||||
| Effect of cross-border tax laws | — | — | % | — | — | % | — | — | % | ||||||||||||||||||||||||||
| Tax credits | — | — | % | — | — | % | — | — | % | ||||||||||||||||||||||||||
| Changes in valuation allowances | (9) | (2) | % | (3) | 4 | % | (9) | 18 | % | ||||||||||||||||||||||||||
| Nontaxable or nondeductible items | — | — | % | (2) | 3 | % | — | — | % | ||||||||||||||||||||||||||
| Prior period accruals | (2) | — | % | (5) | 7 | % | (3) | 6 | % | ||||||||||||||||||||||||||
| Other adjustments | — | — | % | 1 | (1) | % | — | — | % | ||||||||||||||||||||||||||
| Effective tax rate | $ | (15) | (3) | % | $ | (127) | 174 | % | $ | (363) | 741 | % | |||||||||||||||||||||||
Tronox Holdings plc is a U.K. public limited company and the parent company for the business group. The statutory tax rate in the U.K. was 25% at December 31, 2025, 2024 and 2023. The statutory rate in the U.K. changed to 25% effective April 1, 2023 and a weighted average rate of 23.5% was applied for the full year 2023.
The effective tax rates in 2025, 2024 and 2023 are all influenced by a variety of factors, primarily income and losses in jurisdictions with valuation allowances, non-taxable income and expenses, withholding taxes, prior year accruals, and rates different than the United Kingdom statutory rate. The valuation allowances in each year were impacted by items other than
income and losses as follows: 2024 was impacted by recording valuation allowances in Brazil and the Netherlands and 2023 was impacted by recording valuation allowances in China and Australia.
Net deferred tax assets (liabilities) at December 31, 2025 and 2024 were comprised of the following:
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Deferred tax assets: | |||||||||||
| Net operating loss and other carryforwards | $ | 1,940 | $ | 1,812 | |||||||
| Property, plant and equipment, net | 146 | 167 | |||||||||
| Reserves for environmental remediation and restoration | 61 | 52 | |||||||||
| Obligations for pension and other employee benefits | 46 | 42 | |||||||||
| Investments | — | — | |||||||||
| Grantor trusts | 604 | 603 | |||||||||
| Inventories, net | 12 | 14 | |||||||||
| Interest | 138 | 161 | |||||||||
| Lease liabilities | 51 | 45 | |||||||||
| Other accrued liabilities | 4 | 4 | |||||||||
| Intangible assets | 10 | 5 | |||||||||
| Other | 3 | 6 | |||||||||
| Total deferred tax assets | 3,015 | 2,911 | |||||||||
| Valuation allowance associated with deferred tax assets | (2,040) | (1,951) | |||||||||
| Net deferred tax assets | 975 | 960 | |||||||||
| Deferred tax liabilities: | |||||||||||
| Inventories, net | (7) | (7) | |||||||||
| Property, plant and equipment, net | (291) | (250) | |||||||||
| Intangible assets, net | — | — | |||||||||
| Lease assets | (50) | (44) | |||||||||
| Foreign exchange | (2) | (1) | |||||||||
| Interest | — | — | |||||||||
| Other | — | (2) | |||||||||
| Total deferred tax liabilities | (350) | (304) | |||||||||
| Net deferred tax asset | $ | 625 | $ | 656 | |||||||
| Balance sheet classifications: | |||||||||||
| Deferred tax assets — long-term | $ | 833 | $ | 830 | |||||||
| Deferred tax liabilities — long-term | $ | (208) | $ | (174) | |||||||
| Net deferred tax asset | $ | 625 | $ | 656 | |||||||
The net deferred tax assets reflected in the above table include deferred tax assets related to grantor trusts, which were established as Tronox Incorporated emerged from bankruptcy during 2011. The balances relate to the assets contributed to such grantor trusts by Tronox Incorporated and the proceeds from the resolution of previous litigation of $5.2 billion during 2014, which resulted in additional deferred tax assets of $2.0 billion. As the grantor trusts continue to spend funds received from the litigation and earn income from the investment of those funds, the U.S. net operating loss will increase or decrease.
There was an increase to our valuation allowance of $89 million and $91 million during 2025 and 2024, respectively. The table below sets forth the changes, by jurisdiction:
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| United Kingdom | $ | 11 | $ | 5 | |||||||
| United States | 1 | (1) | |||||||||
| Australia | 9 | 39 | |||||||||
| The Netherlands | 47 | 32 | |||||||||
| Brazil | 3 | 15 | |||||||||
| China | 18 | 1 | |||||||||
| Total increase in valuation allowances | $ | 89 | $ | 91 | |||||||
During the year ended December 31, 2024, we identified negative evidence concerning our ability to realize our deferred tax assets in Brazil and the Netherlands. This evidence primarily relates to operational losses generated during the year, a three-year cumulative loss threshold crossed during the year, and fluctuating levels of income and expenses which have led to uncertainty regarding the ability to generate net income in these regions for the foreseeable future. After weighing all the positive and
negative evidence, we determined it is more likely than not that Brazil and the Netherlands deferred tax assets may not be realized. As a result, we recorded non-cash charges of $16 million and $33 million to tax expense for Brazil and the Netherlands, respectively.
At December 31, 2025, we continue to maintain full valuation allowances related to the total net deferred tax assets in Australia, Brazil, the Netherlands and the United Kingdom, as we cannot objectively assert that these deferred tax assets are more likely than not to be realized. Future provisions for income taxes in these jurisdictions will include no tax benefits with respect to losses incurred and tax expense only to the extent of current tax payments until the valuation allowances are eliminated. Additionally, we have valuation allowances against specific tax assets in China, South Africa and the U.S.
The deferred tax assets generated by tax loss carryforwards in Australia, Brazil, China, the Netherlands and the United Kingdom have been fully offset by valuation allowances. In the United States, the deferred tax assets generated by tax loss carryforwards are partially offset by a valuation allowance to the extent they are subject to expiration. The expiration of tax loss carryforwards at December 31, 2025 are shown below. The tax loss carryforwards in Australia, Brazil, France, Saudi Arabia, South Africa, the Netherlands and the United Kingdom do not expire.
| 2026 | 2027 | 2028 | 2029 | 2030 | 2031 - 2045 | Unlimited | Total Tax Loss Carryforwards | ||||||||||||||||||||||||||||||||||||||||
| United Kingdom | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | (171) | $ | (171) | |||||||||||||||||||||||||||||||
| Australia | — | — | — | — | — | — | (775) | (775) | |||||||||||||||||||||||||||||||||||||||
| The Netherlands | — | — | — | — | — | — | (285) | (285) | |||||||||||||||||||||||||||||||||||||||
| France | — | — | — | — | — | — | (191) | (191) | |||||||||||||||||||||||||||||||||||||||
| South Africa | — | — | — | — | — | — | (31) | (31) | |||||||||||||||||||||||||||||||||||||||
| China | — | (3) | (7) | — | (13) | — | — | (23) | |||||||||||||||||||||||||||||||||||||||
| Brazil | — | — | — | — | — | — | (39) | (39) | |||||||||||||||||||||||||||||||||||||||
| Saudi Arabia | — | — | — | — | — | — | (1) | (1) | |||||||||||||||||||||||||||||||||||||||
| U.S. Federal | — | — | — | — | — | (3,899) | (418) | (4,317) | |||||||||||||||||||||||||||||||||||||||
| U.S. State | (55) | (2) | (3) | (1) | (175) | (3,958) | (55) | (4,249) | |||||||||||||||||||||||||||||||||||||||
| Total tax loss carryforwards | $ | (55) | $ | (5) | $ | (10) | $ | (1) | $ | (188) | $ | (7,857) | $ | (1,966) | $ | (10,082) | |||||||||||||||||||||||||||||||
At December 31, 2025, Tronox Holdings plc had foreign subsidiaries with undistributed earnings. Although we would not be subject to income tax on these earnings, amounts totaling $720 million are in specific jurisdictions which we assert are indefinitely reinvested outside of the parents' taxing jurisdictions. These amounts could be subject to withholding tax if distributed, but the Company has made no provision for tax related to these undistributed earnings. The Company has removed its assertion that earnings in China are indefinitely reinvested, and the withholding tax accruals for potential repatriations from that jurisdiction are now reflected in the effective tax rate reconciliation above.
The noncurrent liabilities section of our Consolidated Balance Sheet does not reflect any reserves for uncertain tax positions for either 2025 or 2024.
Our Brazil, China, Netherlands and Saudi Arabia returns are closed through 2020; our South Africa, UK and U.S. returns are closed through 2021; and our France return is closed through 2022. During the year ended December 31, 2025, the Company received notification that the Australian Taxation Office ("ATO") initiated an audit of Tronox Limited, Tronox Holdings plc and their associates for the calendar years 2019 - 2022. As of the date hereof, the Company is continuing to respond to requests for information with respect to this audit.
We believe that we have made adequate provision for income taxes that may be payable with respect to years open for examination; however, the ultimate outcome is not presently known and, accordingly, additional provisions may be necessary and/or reclassifications of noncurrent tax liabilities to current may occur in the future.
The new U.S. tax law, officially titled the "One Big Beautiful Bill", was signed into law on July 4, 2025. It represents a significant update of tax policy and includes a wide range of provisions. Many of the policy updates do not have a material impact on our U.S. entities.
During the year ended December 31, 2023, the United Kingdom enacted legislation consistent with guidance from the Organization for Economic Co-operation and Development ("OECD") for the implementation of Pillar Two, effective beginning in 2024. Additionally, various other jurisdictions have now implemented Domestic Minimum Taxes which are also effective beginning in 2024. Neither the UK Multinational Top-up Tax nor any jurisdiction's Domestic Minimum Tax have an impact on our income tax provisions for 2025.
The net amount of taxes paid and refunded is presented in the Consolidated Statement of Cash Flows. Detail for the income taxes paid by the Company by jurisdiction are as follows:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Canada | $ | — | $ | (7) | $ | — | |||||||||||
| France | — | — | (3) | ||||||||||||||
| The Netherlands | — | — | (4) | ||||||||||||||
| Saudi Arabia | — | 2 | (12) | ||||||||||||||
| South Africa | (4) | (4) | (34) | ||||||||||||||
| United Kingdom | 1 | — | — | ||||||||||||||
| Other jurisdictions | (1) | (1) | (1) | ||||||||||||||
| Incomes taxes paid | $ | (4) | $ | (10) | $ | (54) | |||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 20, 2026 | Showing above |
| 2024 | Feb 19, 2025 | |
| 2023 | Feb 21, 2024 | |
| 2022 | Feb 22, 2023 | |
| 2021 | Feb 22, 2022 | |
| 2020 | Feb 23, 2021 | |
| 2019 | Mar 16, 2020 | |
| 2018 | Feb 28, 2019 | |
| 2017 | Mar 1, 2018 | |
| 2016 | Feb 24, 2017 | |
| 2015 | Feb 25, 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.