A provision for income taxes of $699 million, $292 million and $110 million has been recognized for the years ended December 31, 2021, 2020 and 2019, respectively, related primarily to our subsidiaries located outside of the U.S. Our income (loss) before provision for income taxes for the years ended December 31, 2021, 2020 and 2019 was as follows (in millions):


	Year Ended December 31,
	2021			2020			2019
Domestic	$	(130	)	$	(198	)	$	(287	)
Noncontrolling interest and redeemable noncontrolling interest		125			141			87
Foreign		6,348			1,211			(465	)
Income (loss) before income taxes	$	6,343		$	1,154		$	(665	)

The components of the provision for income taxes for the years ended December 31, 2021, 2020 and 2019 consisted of the following (in millions):


	Year Ended December 31,
	2021			2020		2019
Current:
Federal	$	—		$	—	$	—
State		9			4		5
Foreign		839			248		86
Total current		848			252		91
Deferred:
Federal		—			—		(4	)
State		—			—		—
Foreign		(149	)		40		23
Total deferred		(149	)		40		19
Total provision for income taxes	$	699		$	292	$	110

Deferred tax assets (liabilities) as of December 31, 2021 and 2020 consisted of the following (in millions):


	December 31,			December 31,
	2021			2020
Deferred tax assets:
Net operating loss carry-forwards	$	7,607		$	2,172
Research and development credits		923			624
Other tax credits and attributes		335			168
Deferred revenue		546			450
Inventory and warranty reserves		377			315
Stock-based compensation		115			98
Operating lease right-of-use liabilities		430			335
Deferred GILTI tax assets		556			581
Accruals and others		191			205
Total deferred tax assets		11,080			4,948
Valuation allowance		(9,074	)		(2,930	)
Deferred tax assets, net of valuation allowance		2,006			2,018
Deferred tax liabilities:
Depreciation and amortization		(1,279	)		(1,488	)
Investment in certain financing funds		(209	)		(198	)
Operating lease right-of-use assets		(391	)		(305	)
Deferred revenue		(49	)		(50	)
Other		(13	)		(61	)
Total deferred tax liabilities		(1,941	)		(2,102	)
Deferred tax assets (liabilities), net of valuation allowance	$	65		$	(84	)

As of December 31, 2021, we recorded a valuation allowance of $9.07 billion for the portion of the deferred tax asset that we do not expect to be realized. The valuation allowance on our net deferred taxes increased by $6.14 billion, $974 million, and $150 million during the years ended December 31, 2021, 2020 and 2019, respectively. The changes in valuation allowance are primarily due to additional U.S. deferred tax assets and liabilities incurred in the respective year. We have $417 million of deferred tax assets in foreign jurisdictions, which management believes are more-likely-than-not to be fully realized given the expectation of future earnings in these jurisdictions. We did not have any material releases of valuation allowance for the years ended December 31, 2021, 2020 and 2019. We continue to monitor the realizability of the U.S. deferred tax assets taking into account multiple factors. In completing this assessment, we considered both objective and subjective factors. These factors included, but were not limited to, a history of losses in prior years, excess tax benefits related to stock-based compensation, future reversal of existing temporary differences and tax planning strategies. After evaluating all available evidence, we intend to continue maintaining a full valuation allowance on our U.S. deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of these allowances. Given the improvement in our operating results and depending on the amount of stock-based compensation tax deductions available in the future, we may release the valuation allowance associated with the U.S. deferred tax assets in the next few years. Release of all, or a portion, of the valuation allowance would result in the recognition of certain deferred tax assets and a decrease to income tax expense for the period the release is recorded.

The reconciliation of taxes at the federal statutory rate to our provision for income taxes for the years ended December 31, 2021, 2020 and 2019 was as follows (in millions):


	Year Ended December 31,
	2021			2020			2019
Tax at statutory federal rate	$	1,332		$	242		$	(139	)
State tax, net of federal benefit		6			4			5
Nondeductible executive compensations		201			184			62
Other nondeductible expenses		67			52			32
Excess tax benefits related to stock based compensation		(7,123	)		(666	)		(7	)
Foreign income rate differential		(668	)		33			189
U.S. tax credits		(328	)		(181	)		(107	)
Noncontrolling interests and redeemable noncontrolling interests adjustment		11			5			(29	)
GILTI inclusion		1,008			133			—
Convertible debt		—			—			(4	)
Unrecognized tax benefits		28			1			17
Change in valuation allowance		6,165			485			91
Provision for income taxes	$	699		$	292		$	110

As of December 31, 2021, we had $31.2 billion of federal and $21.6 billion of state net operating loss carry-forwards available to offset future taxable income, some of which, if not utilized, will begin to expire in 2022 for federal and state purposes. A portion of these losses were generated by SolarCity and some of the companies we acquired, and therefore are subject to change of control provisions, which limit the amount of acquired tax attributes that can be utilized in a given tax year. We do not expect the change of control limitations to significantly impact our ability to utilize these attributes.

Our 2021 net operating loss included corporate income tax deductions related to our CEO’s exercise of the remaining stock options from the 2012 CEO Performance Award, which resulted in a $23.45 billion tax deduction. Such increase in net operating loss is included in our deferred income tax assets, offset by a valuation allowance. Section 162(m) of the Internal Revenue Code was amended for deductibility of executive compensation for stock grants after 2017. Therefore, we are not expecting substantial corporate income tax deductions from our CEO's subsequent option exercises.

As of December 31, 2021, we had research and development tax credits of $738 million and $584 million for federal and state income tax purposes, respectively. If not utilized, the federal research and development tax credits will expire in various amounts beginning in 2024. However, the state of California research and development tax credits can be carried forward indefinitely. In addition, we have other general business tax credits of $186 million for federal income tax purposes, which will not begin to significantly expire until 2033.

Federal and state laws can impose substantial restrictions on the utilization of net operating loss and tax credit carry-forwards in the event of an “ownership change,” as defined in Section 382 of the Internal Revenue Code. We have determined that no significant limitation would be placed on the utilization of our net operating loss and tax credit carry-forwards due to prior ownership changes.

The local government of Shanghai granted a beneficial corporate income tax rate of 15% to certain eligible enterprises, compared to the 25% statutory corporate income tax rate in China. Our Gigafactory Shanghai subsidiary was granted this beneficial income tax rate of 15% for 2019 through 2023.

We constantly assess our intent to reinvest our offshore earnings. As of December 31, 2021, we no longer intend to reinvest certain undistributed earnings of our foreign entities that have been previously taxed in the U.S, while for the remainder of our undistributed earnings, we intend to indefinitely reinvest. We have recorded the taxes associated with the earnings we intend to repatriate in the future. For the earnings we intend to indefinitely reinvest, no deferred tax liabilities for foreign withholding or state taxes have been recorded. As of December 31, 2021, such undistributed earnings were approximately $161 million. The amount of any unrecognized deferred tax liability associated with these earnings is immaterial.

The changes to our gross unrecognized tax benefits were as follows (in millions):



December 31, 2018	$	253
Decreases in balances related to prior year tax positions		(39	)
Increases in balances related to current year tax positions		59
December 31, 2019		273
Increases in balances related to prior year tax positions		66
Increases in balances related to current year tax positions		41
December 31, 2020		380
Increases in balances related to prior year tax positions		117
Decreases in balances related to prior year tax positions		(90	)
Increases in balances related to current year tax positions		124
December 31, 2021	$	531

As of December 31, 2021, accrued interest and penalties related to unrecognized tax benefits are classified as income tax expense and were immaterial. Unrecognized tax benefits of $473 million, if recognized, would not affect our effective tax rate since the tax benefits would increase a deferred tax asset that is currently fully offset by a valuation allowance.

We file income tax returns in the U.S., California and various state and foreign jurisdictions. We are currently under examination by the IRS for the years 2015 to 2018. Additional tax years within the periods 2004 to 2014 and 2019 to 2020 remain subject to examination for federal income tax purposes, and 2004 and subsequent tax years remain subject to examination for California income tax purposes. All net operating losses and tax credits generated to date are subject to adjustment for U.S. federal and California income tax purposes. Our returns for 2008 and subsequent tax years remain subject to examination in other U.S. state and foreign jurisdictions.

Given the uncertainty in timing and outcome of our tax examinations, an estimate of the range of the reasonably possible change in gross unrecognized tax benefits within twelve months cannot be made at this time.