Company: APTV
Filing Date: 2025-02-07
Form Type: 10-K
Source: 0001521332-25-000010
Chunk: 193

Company: Aptiv PLC
Filing Date: 2025-02-07
Form: 10-K
Item: Item 8
Chunk 193
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 resulting gains on these transfers were eliminated for purposes of the consolidated financial statements. However, certain of these transfers resulted in a gain that is subject to income tax in the local jurisdiction, which was offset with the utilization of existing net operating loss carryforwards. A portion of the net operating loss carryforwards were previously reduced by deferred tax liabilities from recapturable deductions, which were eliminated as part of the intercompany transactions, while the remaining net operating loss carryforwards were largely offset by a valuation allowance. Consequently, during the year ended December 31, 2023, the Company recognized a net deferred tax expense of approximately $55 million, which is comprised of deferred tax benefits of approximately $2,075 million related to the release of valuation allowances as a result of the transfers and deferred tax expense of approximately $2,130 million to reflect utilization of the loss carryforwards.As a result of the intellectual property transfers during the year ended December 31, 2023, the Company’s Swiss subsidiary, which received the intellectual property, recognized a step-up in tax basis on the fair value of the transferred intellectual property. This resulted in the creation of a temporary difference between the book basis and tax basis of the specified intellectual property. Consequently, the Company recorded a deferred tax benefit of approximately $1,820 million during the year ended December 31, 2023, which was increased from the amounts disclosed as of September 30, 2023, primarily as a result of additional intellectual property transfers in the fourth quarter of 2023.Furthermore, the Company’s Swiss subsidiary was granted a ten-year tax incentive, beginning in 2024. A deferred tax benefit of approximately $330 million, net of a valuation allowance, was recorded during the year ended December 31, 2023 to reflect the estimated future reductions in tax associated with the incentive. This amount was increased from the amount disclosed as of September 30, 2023, primarily as a result of changes in the estimated utilization of the tax incentive from the additional transfers of intellectual property in the fourth quarter of 2023.The total income tax benefit recorded as a result of the intercompany transfers of intellectual property and negotiated tax incentive, all as described above, combined with related additional current year tax expense as a result of the transactions, was approximately $2,080 million during the year ended December 31, 2023.

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The measurement of certain deferred tax assets, as described above, and associated income tax benefits resulting from these transactions was impacted by tax legislation in