Company: DHR
Filing Date: 2025-02-20
Form Type: 10-K
Source: 0000313616-25-000043
Chunk: 172

Company: DANAHER CORP /DE/
Filing Date: 2025-02-20
Form: 10-K
Item: Item 5
Chunk 172
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 audit for years ranging from 2004 through 2023. 

In the fourth quarter of 2022, the IRS proposed significant adjustments to the Company’s taxable income for the years 2016 through 2018 with respect to the deferral of tax on certain premium income related to the Company’s self-insurance programs.  For income tax purposes, the recognition of premium income has been deferred in accordance with U.S. tax laws related to insurance.  The proposed adjustments would have increased the Company’s taxable income over the 2016 through 2018 periods by approximately $2.5 billion.  In the first quarter of 2023, the Company settled these proposed adjustments with the IRS, although the audit is still open with respect to other matters for the 2016 through 2018 period.  The impact of the settlement with respect to the Company’s self-insurance policies was not material to the Company’s financial statements, including cash flows and the effective tax rate.  As the settlement with the IRS was specific to the audit period, the settlement does not preclude the IRS from proposing similar adjustments to the Company’s self-insurance programs with respect to periods after 2018.  Management believes the positions the Company has taken in its U.S. tax returns are in accordance with the relevant tax laws.

Tax authorities in Denmark have issued tax assessments related to interest accrued by certain of the Company’s subsidiaries for the years 2004 through 2015, totaling approximately DKK 2.1 billion including applicable accrued interest (approximately $288 million based on the exchange rate as of December 31, 2024). Management believes the positions the Company has taken in Denmark are in accordance with the relevant tax laws and is actively defending them under appeal to the Danish National Tax Tribunal.  The Company intends on pursuing this matter to the Danish High Court and Danish Supreme Court should the current appeal be unsuccessful.  While the ultimate resolution is uncertain and may take years to resolve, taking into account the provisions and payments the Company has previously made related to these assessments to mitigate further interest accrual claims, the Company does not expect the resolution of this matter to have a future material adverse impact on the Company’s financial statements, including its cash flow and effective tax rate.

The Company expects its 2025 effective tax rate to be approximately 17.5% which is higher than the 2024 rate due primarily to the impact of net discrete tax benefits on the 2024 effective tax rate.  

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