Company: CL
Filing Date: 2025-02-13
Form Type: 10-K
Source: 0000021665-25-000008
Chunk: 110

Company: COLGATE PALMOLIVE CO
Filing Date: 2025-02-13
Form: 10-K
Item: Item 7
Chunk 110
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)Effective Income Tax Rate(2)As Reported GAAP$3,956 $907 22.9 %2022 Global Productivity Initiative85 12 (0.2)%Non-GAAP$4,041 $919 22.7 %

2023Income Before Income TaxesProvision For Income Taxes(1)Effective Income Tax Rate(2)As Reported GAAP$3,392 $937 27.6 %ERISA litigation matter267 55 (0.5)%Foreign tax matter— (126)(3.4)%2022 Global Productivity Initiative32 6 (0.1)%Product recall costs25 6 — %Non-GAAP$3,716 $878 23.6 %

(1) The income tax effect on non-GAAP items is calculated based upon the tax laws and statutory income tax rates applicable in the tax jurisdiction(s) of the underlying non-GAAP adjustment. 

(2) The impact of non-GAAP items on the Company’s effective tax rate represents the difference in the effective tax rate calculated with and without the non-GAAP adjustment on Income before income taxes and Provision for income taxes.

The effective income tax rate in all years benefited from tax planning associated with the Company’s global business initiatives.

In the third quarter of 2023, the Internal Revenue Service (the “IRS”) issued a notice giving taxpayers temporary relief from the effects of certain U.S. tax regulations that were issued in December 2021, which place greater restrictions on foreign taxes that are creditable against U.S. taxes on foreign-source income. This notice allowed taxpayers to defer the application of these new regulations through the end of 2023. In December 2023, the IRS issued further guidance modifying this temporary relief period to the date that a notice or other guidance withdrawing or modifying the temporary relief is issued. The Company will recognize the impact, if any, in the period in which the temporary relief is withdrawn or modified. 

During the quarter ended June 30, 2023, we reassessed with our legal and tax advisers certain tax deductions taken in prior years by one of our subsidiaries and concluded that it was more likely than not that the deductions would not be sustained by the courts in that jurisdiction. The value of the tax deductions was not material to us in any year in which they were taken. The cumulative effect of the change in tax position of $148 was reflected as a discrete item in the quarter ended June 30,