Company: ABBV
Filing Date: 2025-02-14
Form Type: 10-K
Source: 0001551152-25-000020
Chunk: 357

Company: AbbVie Inc.
Filing Date: 2025-02-14
Form: 10-K
Item: Item 8
Chunk 357
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(51.4)(1.1)0.9 Acquisition costs13.4 0.2 — All other, net(0.1)1.1 — Effective tax rate(15.3)%22.0 %12.1 %The effective income tax rate fluctuates year to year due to the allocation of the company’s taxable earnings among jurisdictions, as well as certain discrete factors and events in each year, including changes in tax law and business development activities. The effective income tax rates in 2024, 2023 and 2022 differed from the statutory tax rate principally due to the impact of foreign operations with lower income tax rates in locations outside the United States, the U.S. global minimum tax, changes in fair value of contingent consideration, tax audits and settlements, tax credits and incentives in the United States, Puerto Rico and other foreign tax jurisdictions, and business development activities. The effective income tax rate in 2024 was lower than prior periods due to the resolutions of various tax positions pertaining to multiple prior tax years, including the closing of U.S. IRS examinations covering three tax years, partially offset by increases in unrecognized tax benefits pertaining to prior years. The lower effective income tax rate in 2024 also reflects an increase due to acquisition costs related to certain business development activities and a decrease related to changes in fair value of contingent consideration. The effective income tax rate in 2023 was higher than prior periods due to increased changes in fair value of contingent consideration, intangible asset impairments and the impacts of the transition from the Puerto Rico excise tax to an income tax.In 2022, Puerto Rico enacted Act 52-2022 (the Puerto Rico Act) allowing for a transition from a Puerto Rico excise tax levied on gross inventory purchases to an income-based tax beginning in 2023. The company completed the transition requirements of the Puerto Rico Act in 2022, resulting in the remeasurement of certain deferred tax assets and liabilities 

93     |  2024 Form 10-K

based on income tax rates at which they are expected to reverse in the future. The net tax benefit recognized in 2022 from the remeasurement of deferred taxes related to the Puerto Rico Act was $323 million.The Tax Cuts and Jobs Act (the Act) was signed into law in December 2017, resulting in significant changes to the U.S. corporate tax system, including a one-time transition tax on a mandatory deemed repatriation of earnings