Income Taxes

3 Months Ended

Apr. 03, 2022

Income Tax Disclosure [Abstract]

Income Taxes

8. INCOME TAXES

Our effective tax rate may vary from the U.S. federal statutory tax rate due to the change in the mix of earnings in tax jurisdictions with different statutory rates, benefits related to tax credits, and the tax impact of non-deductible expenses and other permanent differences between income before income taxes and taxable income.

Our effective tax rate was 38.3% in Q1 2022 compared to 13.1% in Q1 2021. In Q1 2022, the variance from the U.S. federal statutory tax rate of 21% was primarily attributable to the $24 million impact of GRAIL pre-acquisition net operating losses on global intangible low-taxed income (GILTI) and the utilization of U.S. foreign tax credits, and the $4 million impact of research and development expense capitalization for tax purposes. This was partially offset by the mix of earnings in jurisdictions with lower statutory tax rates than the U.S. federal statutory tax rate, such as in Singapore and the United Kingdom.