Income Taxes (Tables)

12 Months Ended

Sep. 30, 2017

U.S. and non-U.S. income before income tax

The Company’s income before taxes by fiscal year consisted of the following:



	2017		2016		2015
	(in millions)
U.S.	$	8,440	$	5,839	$	7,214
Non-U.S.	3,254		2,173		1,781
Total income before taxes	$	11,694	$	8,012	$	8,995

Comprehensive Income Tax (Expense) Benefit Components Table

Income tax provision by fiscal year consisted of the following:



	2017		2016			2015
	(in millions)
Current:
U.S. federal	$	2,377	$	2,250		$	1,991
State and local	291		181			168
Non-U.S.	629		368			300
Total current taxes	3,297		2,799			2,459
Deferred:
U.S. federal	1,607		(508		)	181
State and local	66		(63		)	1
Non-U.S.	25		(207		)	26
Total deferred taxes	1,698		(778		)	208
Total income tax provision	$	4,995	$	2,021		$	2,667

Components of Deferred Tax Assets and Liabilities

The tax effect of temporary differences that give rise to significant portions of deferred tax assets and liabilities at September 30, 2017 and 2016, are presented below:



	2017			2016
	(in millions)
Deferred Tax Assets:
Accrued compensation and benefits	$	194		$	277
Comprehensive loss	29			106
Accrued litigation obligation	373			373
Client incentives	272			266
Net operating loss carryforwards	45			32
Federal benefit of state taxes	236			195
Federal benefit of foreign taxes	—			1,214
Other	193			280
Valuation allowance	(35		)	(31		)
Deferred tax assets	1,307			2,712
Deferred Tax Liabilities:
Property, equipment and technology, net	(391		)	(278		)
Intangible assets	(6,756		)	(7,013		)
Foreign taxes	(59		)	(106		)
Other	—			(101		)
Deferred tax liabilities	(7,206		)	(7,498		)
Net deferred tax liabilities	$	(5,899	)	$	(4,786	)

Reconciliation of the US Statutory Federal Tax Rate

The income tax provision differs from the amount of income tax determined by applying the applicable U.S. federal statutory rate of 35% to pretax income, as a result of the following:



	For the Years Ended September 30,
	2017					2016					2015
	Dollars			Percent		Dollars			Percent		Dollars			Percent
	(in millions, except percentages)
U.S. federal income tax at statutory rate	$	4,093		35	%	$	2,804		35	%	$	3,148		35	%
State income taxes, net of federal benefit	200			2	%	135			2	%	194			2	%
Non-U.S. tax effect, net of federal benefit	(641		)	(5	)%	(553		)	(7	)%	(327		)	(4	)%
Reorganization of Visa Europe and other legal entities	1,515			13	%	—			—	%	—			—	%
Remeasurement of deferred tax liability	—			—	%	(88		)	(1	)%	—			—	%
Reversal of prior years tax reserves related to the resolution of uncertain tax positions	—			—	%	—			—	%	(239		)	(2	)%
Revaluation of Visa Europe put option	—			—	%	(89		)	(1	)%	—			—	%
Other, net	(172		)	(2	)%	(188		)	(3	)%	(109		)	(1	)%
Income tax provision	$	4,995		43	%	$	2,021		25	%	$	2,667		30	%

Unrecognized Tax Benefits Reconciliation, Table

A reconciliation of beginning and ending unrecognized tax benefits by fiscal year is as follows:



	2017			2016
	(in millions)
Beginning balance at October 1	$	1,160		$	1,051
Increases of unrecognized tax benefits related to prior years	56			153
Decreases of unrecognized tax benefits related to prior years	(59		)	(180		)
Increases of unrecognized tax benefits related to current year	197			138
Reductions related to lapsing statute of limitations	(1		)	(2		)
Ending balance at September 30	$	1,353		$	1,160