Company: APTV
Filing Date: 2025-05-01
Form Type: 10-Q
Source: 0001521332-25-000027
Chunk: 180

Company: Aptiv PLC
Filing Date: 2025-05-01
Form: 10-Q
Item: Item 8
Chunk 180
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 March 31, 2025 and 2024, respectively.

On December 15, 2022, the European Union (the “E.U.”) Member States formally adopted the Pillar Two Framework (the “Framework”), which generally provides for a minimum effective tax rate of 15%, as established by the Organisation for Economic Co-operation and Development (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 three months ended March 31, 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 

24

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 three months ended March 31, 2025. No other deferred tax assets are impacted by the Guidance. 

12. SHAREHOLDERS’ EQUITY AND NET INCOME PER SHAREChange of Tax ResidencyIn connection with the reorganization transaction as further described in Note 1. General, in December 2024, Old Aptiv established a new publicly-listed Jersey parent company, New Aptiv, which is resident for tax purposes in Switzerland. As a result of the Transaction, all issued and outstanding ordinary shares of Old Aptiv were exchanged on a one-for-one basis for newly issued ordinary shares of New Aptiv. Following consummation of the Transaction, holders of Old Aptiv shares became ordinary shareholders of New Aptiv, Old Aptiv became a wholly-owned subsidiary of New Aptiv and New Aptiv was renamed “Aptiv PLC.” Old Aptiv merged with and into Aptiv Swiss Holdings, a newly formed Jersey incorporated private limited company, and a direct, wholly-owned subsidiary of New