INCOME TAXES

6 Months Ended

Jun. 30, 2024

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

In connection with the Separation, the Company entered into a tax matters agreement with Cummins that, among other things, formalized our agreement related to the responsibility for historical tax positions for the period prior to the IPO for jurisdictions where our business was included in the consolidated or combined tax returns of Cummins.

Atmus’ effective tax rate for the three and six months ended June 30, 2024, was 21.8% and 21.9%, respectively. Atmus’ effective tax rate for the three and six months ended June 30, 2023, was 24.5% and 24.1%, respectively. The decrease in the effective tax rate was driven by a change in the mix of earnings among tax jurisdictions and discrete tax items. The Company’s effective tax rate differs from the U.S. statutory rate primarily due to differences in rates applicable to foreign subsidiaries, withholding taxes and state income taxes.

The Organization for Economic Co-operation and Development (“OECD”) introduced Base Erosion and Profit Shifting (“BEPS”) Pillar 2 rules that impose a global minimum tax rate of 15%. Numerous countries have enacted legislation that is effective as of January 1, 2024. We have evaluated the impact of this legislation based on Atmus’ current global landscape and have determined it will not have a material impact. We will continue to update our analysis and monitor the ongoing legislation throughout the year.