Company: APTV
Filing Date: 2025-10-30
Form Type: 10-Q
Source: 0001521332-25-000051
Chunk: 139

Company: Aptiv PLC
Filing Date: 2025-10-30
Form: 10-Q
Item: Item 2
Chunk 139
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45 million and $65 million, respectively, primarily related to changes in valuation allowances. Also included as discrete items in the effective tax rate for the nine months ended September 30, 2024 are the beneficial impacts of a business reorganization that occurred in the second quarter of 2024 and approximately 5 points resulting from the Motional funding and ownership restructuring transactions, as described further in Note 21. Investment in Affiliates to the consolidated financial statements contained herein. There was no tax expense associated with the gain on the Motional transactions as Aptiv’s interest in Motional is exempt from capital gains tax in the jurisdiction in which it is owned. 

On December 15, 2022, the E.U. Member States formally adopted the Framework, which generally provides for a minimum effective tax rate of 15%, as established by the OECD. Many countries have enacted legislation consistent with the Framework effective at the beginning of 2024. The OECD continues to release additional guidance on these rules. The Company has proactively responded to these tax policy changes and will continue to closely monitor developments. Our effective tax rate for the nine months ended September 30, 2025 includes an unfavorable impact from the enacted Framework.

On January 15, 2025, the OECD released Administrative Guidance (the “Guidance) on Article 9.1 of the Global Anti-Base Erosion Model Rules (the “Model Rules”) which amends the Pillar Two Framework. Jurisdictions that have adopted the Framework may implement and administer their domestic laws consistent with the Model Rules and Guidance. The Guidance eliminates the tax basis in certain deferred tax assets including tax credit carryforwards for purposes of the global minimum tax established under the Framework. As a result, the Company no longer expects to obtain significant benefits from the tax incentive granted to its Swiss subsidiary in 2023. Accordingly, the Company recognized an increase to valuation allowances of $294 million to reduce the related deferred tax asset during the nine months ended September 30, 2025. No other deferred tax assets are impacted by the Guidance. 

On July 4, 2025, the One Big Beautiful Bill Act (the “Act”) was enacted into law. The Act includes changes to U.S. tax law that will be applicable to Aptiv beginning in 2025, with additional provisions applying in subsequent years. Included in these changes are favorable adjustments to deductions for interest, qualified property, and research and development expenditures, as well as reforms to the international tax framework. The Act will