Company: APTV
Filing Date: 2025-05-01
Form Type: 10-Q
Source: 0001521332-25-000027
Chunk: 34

Company: Aptiv PLC
Filing Date: 2025-05-01
Form: 10-Q
Item: Item 1
Chunk 34
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 no tax benefit or expense was recognized due to a valuation allowance. The Company’s effective tax rate is also impacted by the receipt of certain tax incentives and holidays that reduce the effective tax rate for certain subsidiaries below the statutory rate. The Company’s effective tax rate for the three months ended March 31, 2025 includes net discrete tax expense of approximately $281 million, primarily related to changes in valuation allowances, as described below, partially offset by changes in reserves. The Company’s effective tax rate for the three months ended March 31, 2024 includes net discrete tax expense of approximately $7 million, primarily related to changes in the tax benefits of vested share-based compensation and changes in accruals for unremitted earnings. Aptiv PLC is a Swiss resident taxpayer and not a domestic corporation for U.S. federal income tax purposes. As such, it is not subject to U.S. tax on remitted foreign earnings and, as a result of its capital structure, is also generally not subject to Swiss tax on the repatriation of foreign earnings.Cash paid or withheld for income taxes was $58 million and $67 million for the three months ended 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 

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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