Company: VEEV
Filing Date: 2025-11-21
Form Type: 10-Q
Source: 0001393052-25-000078
Chunk: 34

Company: VEEVA SYSTEMS INC
Filing Date: 2025-11-21
Form: 10-Q
Item: Part I, Item 3
Chunk 34
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 States and various foreign jurisdictions. Our domestic and international tax liabilities are subject to the allocation of expenses in differing jurisdictions and complex transfer pricing regulations administered by taxing authorities in these jurisdictions. Tax rates may change as a result of factors outside of our control or relevant taxing authorities may disagree with our determinations as to the income and expenses attributable to specific jurisdictions. In addition, changes in tax and trade laws, treaties or regulations, or their interpretation or enforcement, have become more unpredictable and may become more stringent, which could have a material adverse effect on our tax position. Additionally, volatility in our stock price would affect the excess tax benefits from our equity compensation, which may adversely impact our effective tax rate. Forecasting our estimated annual effective tax rate is complex and subject to uncertainty, and there may be material differences between our forecasted and actual tax rates. Moreover, increases in our effective tax rate would reduce our profitability.

Our income tax provision could also be impacted by changes in accounting principles and changes in U.S. federal and state or international tax laws applicable to multinational corporations. For example, the One Big Beautiful Bill Act includes significant tax provisions such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act of 2017 (“TCJA”), modifications to the international tax framework and restoration of immediate expensing for domestic research and development expenditures, which were previously required to be capitalized and amortized over five years under TCJA. Changes in the interpretation or implementation of this new law have impacted in the past and may impact in the future the calculation of our tax payments and our financial results.

Any changes in taxing jurisdictions’ administrative interpretations, decisions, policies, and positions could also impact our tax liabilities. The overall tax environment has made it increasingly challenging for multinational corporations to operate with certainty about taxation in many jurisdictions. For example, the Organisation for Economic Co-operation and Development (“OECD”) is making progress with ongoing reforms of the international tax system, including changes to the practice of shifting profits among affiliated entities located in different tax jurisdictions. In October 2021, the OECD announced that more than 135 jurisdictions agreed on a two-pillar solution to address the tax challenges arising from the digitalization of the economy, including a global minimum effective corporate tax rate of 15% for certain large multinational companies, referred to as Pillar Two. A number of countries, including the United Kingdom, have implemented the legislation effective January 1, 2024, and we expect others to follow. We continue to monitor and assess the developments and implications surrounding changes in the