Income Taxes

9 Months Ended

Jan. 28, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company's effective tax rate for the three and nine months ended January 28, 2022 was 6.7 percent and 8.8 percent, respectively, as compared to (4.8) percent and 2.8 percent for the three and nine months ended January 29, 2021, respectively. The increase in our effective tax rate for the three and nine months ended January 28, 2022, as compared to the corresponding periods in the prior fiscal year, was primarily due to the impact of year-over-year changes in operational results by jurisdiction, the $106 million net tax benefit associated with the resolution of an audit at the IRS Appellate level for fiscal years 2012 through 2014, and the $83 million benefit related to the capitalization of certain research and development costs for U.S. income tax purposes recorded during the three and nine months ended January 29, 2021 as compared to the $82 million net deferred tax benefit associated with a step up in tax basis for Swiss Cantonal purposes recorded during the three and nine months ended January 28, 2022.

At both January 28, 2022 and April 30, 2021, the Company's gross unrecognized tax benefits were $1.7 billion. In addition, the Company had accrued gross interest and penalties of $114 million at January 28, 2022. If all of the Company’s unrecognized tax benefits were recognized, approximately $1.6 billion would impact the Company’s effective tax rate. At January 28, 2022 and April 30, 2021, the amount of the Company's gross unrecognized tax benefits, net of cash advance, recorded as a noncurrent liability within accrued income taxes on the consolidated balance sheets was $820 million and $809 million, respectively. The Company recognizes interest and penalties related to income tax matters within income tax provision in the consolidated statements of income and records the liability within either current or noncurrent accrued income taxes on the consolidated balance sheets.

Refer to Note 16 to the consolidated financial statements for additional information regarding the status of current tax audits and proceedings.