Company: ABBV
Filing Date: 2025-02-14
Form Type: 10-K
Source: 0001551152-25-000020
Chunk: 140

Company: AbbVie Inc.
Filing Date: 2025-02-14
Form: 10-K
Item: Item 3
Chunk 140
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(146)(565)(419)Total deferred taxes$(1,449)$(2,889)$(1,931)Total income tax expense (benefit)$(570)$1,377 $1,632 Effective Tax Rate Reconciliationyears ended December 31 202420232022Statutory tax rate21.0 %21.0 %21.0 %Effect of foreign operations7.6 8.0 (4.4)U.S. tax credits(5.4)(3.1)(2.8)Stock-based compensation (1.2)(1.0)(0.6)Non-deductible expenses1.1 0.7 0.4 Tax law changes and related structuring(0.3)(3.8)(2.4)Tax audits, settlements and reserves(51.4)(1.1)0.9 Acquisition costs13.4 0.2 — All other, net(0.1)1.1 — Effective tax rate(15.3)%22.0 %12.1 %The effective income tax rate fluctuates year to year due to the allocation of the company’s taxable earnings among jurisdictions, as well as certain discrete factors and events in each year, including changes in tax law and business development activities. The effective income tax rates in 2024, 2023 and 2022 differed from the statutory tax rate principally due to the impact of foreign operations with lower income tax rates in locations outside the United States, the U.S. global minimum tax, changes in fair value of contingent consideration, tax audits and settlements, tax credits and incentives in the United States, Puerto Rico and other foreign tax jurisdictions, and business development activities. The effective income tax rate in 2024 was lower than prior periods due to the resolutions of various tax positions pertaining to multiple prior tax years, including the closing of U.S. IRS examinations covering three tax years, partially offset by increases in unrecognized tax benefits pertaining to prior years. The lower effective income tax rate in 2024 also reflects an increase due to acquisition costs related to certain business development activities and a decrease related to changes in fair value of contingent consideration. The effective income tax rate in 2023 was higher than prior periods due to increased changes in fair value of contingent consideration, intangible asset impairments and the impacts of the transition from the Puerto Rico excise tax to an income tax.In 2022, Puerto Rico enacted Act