Income Taxes

6 Months Ended

Mar. 31, 2024

Income Tax Disclosure [Abstract]

Income Taxes

Note 12—Income Taxes

For the three and six months ended March 31, 2024, the effective income tax rates were 15% and 17%, respectively, and for the three and six months ended March 31, 2023, the effective income tax rates were 19% and 18%, respectively. The difference in the effective tax rates is primarily due to the following:

•During the three and six months ended March 31, 2024, a $184 million tax benefit as a result of the conclusion of an audit; and

•During the six months ended March 31, 2023, a $142 million tax benefit due to the reassessment of an uncertain tax position as a result of new information obtained during an ongoing tax examination.

During the three and six months ended March 31, 2024, the Company’s gross unrecognized tax benefits decreased by $117 million and $4 million, respectively, and the Company’s net unrecognized tax benefits decreased by $159 million and $130 million, respectively. The change in unrecognized tax benefits is primarily due to the recognition of previously unrecognized tax benefits as a result of the conclusion of an audit, partially offset by an increase in gross timing differences as well as various tax positions across several jurisdictions. During the three and six months ended March 31, 2024, the Company’s accrued interest related to uncertain tax positions decreased by $72 million and $51 million, respectively. During the three and six months ended March 31, 2023, there were no significant changes in accrued interest related to uncertain tax positions.

In January 2024, a resolution was reached regarding India tax assessments for taxable years falling within the period from 2010 to 2019. As a result, the Company withdrew its appeals to the appellate authorities for these years.

Effective through September 30, 2028, the Company’s operating hub in the Asia Pacific region is subject to a tax incentive in Singapore which is conditional upon meeting certain requirements.

The Company’s tax filings are subject to examination by U.S. federal, state and foreign taxing authorities. The timing and outcome of the final resolutions of the various ongoing income tax examinations and refund claims are uncertain. It is not reasonably possible to estimate the increase or decrease in unrecognized tax benefits within the next 12 months.