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Income Taxes
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
We are subject to income taxation through certain of our subsidiaries primarily in the United States, South Korea, United Kingdom, and other foreign jurisdictions in which we do business.
The components of income tax expense (benefit) were as follows:
(in millions)
202420232022
Current taxes
United States$76 $62 $— 
Foreign106 46 39 
Current taxes182 108 39 
Deferred taxes
United States(15)21 (40)
Foreign240 (905)— 
Deferred taxes225 (884)(40)
Income tax expense (benefit)$407 $(776)$(1)
The components of income (loss) before income taxes are as follows:
(in millions)
202420232022
United States$(1,073)$(217)$(232)
Foreign1,546 801 139 
Income (loss) before income taxes$473 $584 $(93)
Differences between the provision at the federal statutory rate and the provision recorded at the consolidated level are as follows:
(in millions)
202420232022
Taxes computed at the federal statutory rate$99 $122 $(20)
Differences resulting from:
Statutory rate difference32 28 51 
Change in valuation allowances193 (1,031)(144)
U.S. taxes on foreign earnings153 108 103 
Stock compensation56 44 37 
Tax credit(133)(47)(35)
Other nondeductible expense17 — 5 
Other(10)— 2 
Income tax expense (benefit)$407 $(776)$(1)
Our resulting effective tax rate differs from the applicable statutory rate, primarily due to tax credits, U.S. taxes on foreign earnings such as the inclusion of the global intangible low-taxed income (GILTI) provisions, the valuation allowance against deferred tax assets in loss making jurisdictions, and other permanent differences.
The income tax effects of temporary differences that give rise to significant portions of the deferred income tax assets and deferred income tax liabilities were as follows:
(in millions)
December 31, 2024December 31, 2023
Deferred tax assets
Provision and allowances$89 $69 
Stock compensation22 13 
Depreciation13 8 
Accrued expenses104 69 
Amortization22 21 
Defined severance benefits118 84 
Lease liabilities500 409 
Net operating loss carryforwards989 643 
Tax credits89 33 
Other48 36 
Total deferred tax assets1,994 1,385 
Less: valuation allowances(903)(82)
Total deferred tax assets net of valuation allowance$1,091 $1,303 
Deferred tax liabilities
Lease asset(466)(371)
Other(3)(7)
Total deferred tax liabilities(469)(378)
Net deferred tax assets$622 $925 
Changes in the valuation allowances were as follows:
(in millions)
202420232022
Beginning balance, January 1$(82)$(1,085)$(1,284)
Changes to existing valuation allowances(193)140 103 
Farfetch Acquisition(633)— — 
Derecognition of valuation allowances— 905 41 
Changes in foreign exchange rates, statutory rates and other5 (42)55 
Ending balance, December 31$(903)$(82)$(1,085)
The valuation allowance at December 31, 2022 was primarily related to our Korea net operating loss carryforwards that, in our judgement, were not more likely than not to be realized. During 2023, we continued to see improved and sustained profitability in Korea, which represents objective positive evidence for the realizability of certain deferred tax assets. As such, based on our analysis of the positive and negative evidence in each tax jurisdiction, during 2023 we released the valuation allowance primarily related to the Korea net operating loss deferred tax assets. The release of the valuation allowance in 2023 resulted in an increase to the carrying value of deferred tax assets on the balance sheet and a benefit to our provision for income taxes of $905 million. The valuation allowance at December 31, 2024 was primarily related to our U.S. and foreign net operating loss carryforwards for Farfetch subsidiaries.
As of December 31, 2024, we had $3.9 billion of federal, state and foreign net operating loss carryforwards available to reduce future corporate taxable income. Certain of these amounts are subject to annual limitations under applicable tax law. If not utilized, an immaterial amount of these losses will begin to expire in 2025 and $2.7 billion of these losses do not expire.
We have corporate tax credit carryforwards of $29 million in the United States which may be carried forward indefinitely to reduce future corporate regular income taxes, and $79 million of tax credit carryforwards in Korea which begin to expire in 2028.
We did not have any material uncertain tax positions as of December 31, 2024 and 2023.
The open tax years for our major tax jurisdictions are 2020 - 2024 for the United States and 2018 - 2024 for Korea.