Income Taxes

3 Months Ended

Mar. 31, 2019

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Our effective tax rate for the three months ended March 31, 2018 and 2019 was 10.8% and 18.3%, respectively. The increase is primarily due to a release of our deferred tax asset valuation allowance related to the gains on equity securities in the three months ended March 31, 2018 and the non-deductible EC fine in the three months ended March 31, 2019.

Our effective tax rate for the three months ended March 31, 2019 was lower than the U.S. federal statutory rate, primarily due to foreign earnings taxed at lower rates and partially offset by the impact from the EC fine that is not tax deductible.

Our effective tax rate for the three months ended March 31, 2018 was lower than the U.S. federal statutory rate, primarily due to foreign earnings taxed at lower rates and the effects from a release of our deferred tax asset valuation allowance related to the gains on equity securities.

We are subject to income taxes in the U.S. and foreign jurisdictions. Significant judgment is required in evaluating our uncertain tax positions and determining our provision for income taxes. Our total gross unrecognized tax benefits were $4.7 billion and $4.8 billion as of December 31, 2018 and March 31, 2019, respectively. Our total unrecognized tax benefits that, if recognized, would affect our effective tax rate were $2.9 billion and $3.0 billion as of December 31, 2018 and March 31, 2019, respectively.

For information regarding non-income taxes, see Note 10.