Commitments and contingent liabilities

12 Months Ended

Dec. 31, 2025

Disclosure of contingent liabilities [abstract]

20. Commitments and contingent liabilities

COMMITMENTS


Lease commitments are the future cash outflows from the lease contracts which are not recorded in the measurement of lease liabilities. These include potential future payments related to leases of low-value assets, leases which are less than 12 months, variable leases, extension and termination options and leases not yet commenced but which we have committed to.

Other commitments principally comprise commitments under contract to purchase materials and services. They do not include commitments to purchase property,

plant and equipment, which are reported in note 10 on pages 155 to 157.


Lease commitments and other commitments fall due as follows:	€ million Leases 2025	€ million Leases 2024	€ million Other commitments 2025	€ million Other commitments 2024
Within 1 year	89	101	1,371	1,654
Later than 1 year but not later than 5 years	80	163	1,848	2,360
Later than 5 years	43	66	268	184
	212	330	3,487	4,198

20. COMMITMENTS AND CONTINGENT LIABILITIES continued

CONTINGENT LIABILITIES


Contingent liabilities are either possible obligations that will probably not require a transfer of economic benefits, or present obligations that may, but probably will not, require a transfer of economic benefits. It is not appropriate to make provisions for contingent liabilities, but there is a chance that they will result in an obligation in the future. Assessing the amount of liabilities that are not probable is highly judgemental, so contingent liabilities are disclosed on the basis of the known maximum exposure or are unquantified where the financial impact cannot be reliably measured.

Contingent liabilities arise in respect of litigations against group companies, investigations by competition, regulatory and fiscal authorities and obligations arising

under environmental legislation. In many markets, there is a high degree of complexity involved in the local tax regimes. The majority of contingent liabilities are in

respect of fiscal matters in Brazil. In addition, the Group is subject to litigation arising from alleged asbestos contamination in talcum powder products manufactured

and sold decades ago. For cases where settlement is probable and can be reliably estimated, a provision has been recognised. Other cases, where the estimated

financial impact cannot be reliably estimated, are unquantified contingent liabilities.

In the case of fiscal matters, the known maximum exposure is the amount included in a tax assessment.


Summary of contingent liabilities	€ million 2025	€ million 2024
Corporate reorganisation – IPI, PIS and COFINS taxes and penalties	3,557	3,230
Inputs for PIS and COFINS taxes	13	35
Goodwill amortisation	155	144
Other tax assessments – approximately 500 cases	771	855
Total Brazil Tax	4,496	4,264
Other contingent liabilities	496	571
Total contingent liabilities	4,992	4,835

Brazil tax

During 2004, and in common with many other businesses operating in Brazil, one of our Brazilian subsidiaries received a notice of infringement from the Federal

Revenue Service in respect of indirect taxes regarding corporate reorganisation. The notice alleges that a 2001 reorganisation of our local corporate structure was

undertaken without a valid business purpose. The 2001 reorganisation was comparable with restructuring done by many companies in Brazil. The original dispute

was resolved in the courts in the Group’s favour. However, in 2013 a new assessment was raised in respect of a similar matter. Additionally, during the course of 2014

and between 2017 and 2025, other notices of infringement were issued based on the same grounds argued in the previous assessments. The total amount of the tax

assessments in respect of this matter is €3,557 million (2024: €3,230 million).

The Group believes that the likelihood that the Brazilian tax authorities will ultimately prevail is low, however there can be no guarantee of success in court. In each

case, we believe our position is strong, so they have not been provided for and are considered to be contingent liabilities. Due to the fiscal environment in Brazil,

there remains the possibility of material tax assessments related to the same matters for periods not yet assessed. We expect that tax litigation cases related to this

matter may move from the Administrative to the Judicial Courts, although the exact timing is uncertain. In such case, we will be required to make a judicial deposit or

provide a guarantee in respect of the disputed tax, interest and penalties. The judicial process in Brazil is likely to take a number of years to conclude.

The contingent liabilities reported for indirect taxes relating to disputes with the Brazilian authorities are separate from the provisions listed in note 19. Unilever does

not hold provisions and contingent liabilities for the same matters