Income taxes (Tables)

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Components of (Provision for) Benefit from Income Taxes

The components of income tax expense are as follows, whereby ‘Income tax expense Netherlands’ represents the

total tax expense on taxable income generated by our entities in the Netherlands and ‘Income tax expense Foreign’

represents the total tax expense on taxable income generated by our non-Dutch group entities. Hereby ‘Total income

tax expense Netherlands’ includes withholding tax expense withheld at source on income paid by non-Dutch entities

to the Netherlands.

Year ended December 31 (€, in millions)	2021	2022	2023
Netherlands	5,982.8	5,881.0	8,453.5
Foreign	722.7	575.1	630.0
Income before income taxes	6,705.5	6,456.1	9,083.5
Income tax (expense) / benefit current	(865.0)	(818.4)	(1,211.7)
Income tax (expense) / benefit deferred	(28.6)	(44.4)	(58.4)
Income tax (expense) / benefit Netherlands	(893.6)	(862.8)	(1,270.1)
Income tax (expense) / benefit current	(523.5)	(678.3)	(441.3)
Income tax (expense) / benefit deferred	395.7	571.2	275.6
Income tax (expense) / benefit Foreign	(127.8)	(107.1)	(165.7)
Total income tax (expense) / benefit current	(1,388.5)	(1,496.7)	(1,653.0)
Total income tax (expense) / benefit deferred	367.1	526.8	217.2
Total income tax (expense) / benefit	(1,021.4)	(969.9)	(1,435.8)

Current and deferred tax (expense) / benefit can be further broken down into:

Year ended December 31 (€, in millions)	2021	2022	2023
Current year tax (expense) / benefit	(1,367.2)	(1,440.9)	(1,766.1)
Prior year tax (expense) / benefit	(21.3)	(55.8)	113.1
Total current tax (expense) / benefit	(1,388.5)	(1,496.7)	(1,653.0)

Year ended December 31 (€, in millions)	2021	2022	2023
Changes to recognition of operating losses and tax credits	(37.2)	(41.2)	3.0
Prior year tax (expense) / benefit	(2.4)	79.2	(85.2)
Tax rate changes	1.5	(1.1)	13.5
Origination and reversal of temporary differences, operating losses and tax credits	405.2	489.9	285.9
Total deferred tax (expense) / benefit	367.1	526.8	217.2

Reconciliation Between (Provision for) Benefit from Income Taxes

The reconciliation of the income tax expense from the Dutch statutory rate to the effective income tax rate is as

follows:

Year ended December 31 (€, in millions)	2021	%1	2022	%1	2023	%1
Income before income taxes	6,705.5	100.0%	6,456.1	100.0%	9,083.5	100.0%
Income tax expense based on ASML’s domestic rate	(1,676.4)	25.0%	(1,665.7)	25.8%	(2,343.5)	25.8%
Effects of tax rates in foreign jurisdictions	(4.6)	0.1%	13.0	(0.2)%	14.7	(0.2)%
Adjustments in respect of tax-exempt income	—	—%	—	—%	1.4	—%
Adjustments in respect of tax incentives	727.3	(10.8)%	741.2	(11.5)%	941.9	(10.4)%
Adjustments in respect of prior years’ current taxes	(21.3)	0.3%	(55.8)	0.9%	113.1	(1.2)%
Adjustments in respect of prior years’ deferred taxes	(2.4)	—%	79.2	(1.2)%	(85.2)	0.9%
Movements in the liability for unrecognized tax benefits	(21.6)	0.3%	(9.9)	0.2%	(55.0)	0.6%
Tax effects in respect of acquisition/restructuring related items	35.9	(0.5)%	—	—%	—	—%
Change in valuation allowance	(37.2)	0.6%	(41.2)	0.6%	3.0	—%
Equity method investments	(46.7)	0.7%	(38.3)	0.6%	(42.6)	0.5%
Effect of change in tax rates	1.5	—%	(1.1)	—%	13.5	(0.1)%
Other (credits) and non-tax deductible items	24.1	(0.4)%	8.7	(0.1)%	2.9	—%
Income tax expense	(1,021.4)	15.2%	(969.9)	15.0%	(1,435.8)	15.8%

1.As a percentage of income before income taxes.

Liability for Unrecognized Tax Benefits and Deferred Tax Position Recorded on Consolidated Balance Sheets

The liability for unrecognized tax benefits and related accrued interest and penalties and total deferred tax position

recorded on the Consolidated Balance Sheets is as follows:

Year ended December 31 (€, in millions)	2021	2022	2023
Liability for unrecognized tax benefits	(205.9)	(215.5)	(249.7)
Deferred tax assets	1,098.7	1,672.8	1,872.3
Deferred tax liabilities	(34.7)	(51.5)	(122.6)
Deferred and other tax assets (liabilities)	858.1	1,405.8	1,500.0

Reconciliation of Beginning and Ending Balance of Liability for Unrecognized Tax Benefits

A reconciliation of the beginning and ending balance of the liability for unrecognized tax benefits (excluding interest

and penalties) is as follows:

Year ended December 31 (€, in millions)	2021	2022	2023
Balance as at January 1	(138.0)	(144.3)	(160.0)
Gross increases – tax positions in prior period	(21.6)	(11.7)	(44.1)
Gross decreases – tax positions in prior period	8.9	2.0	12.6
Gross increases – tax positions in current period	(18.8)	(23.1)	(27.7)
Settlements	2.5	6.8	2.2
Lapse of statute of limitations	32.0	13.2	17.9
Effect of changes in exchange rates	(9.3)	(2.9)	5.5
Total liability for unrecognized tax benefits	(144.3)	(160.0)	(193.6)
Balance of accrued interest and penalties	(61.6)	(55.5)	(56.1)
Total liabilities for unrecognized tax benefits including interest and penalties	(205.9)	(215.5)	(249.7)

Summary of Income Tax Examinations

The years for which tax returns are still open for examination for respective

jurisdictions are as follows:

Country	Years
Netherlands	2020-2023
US	2017-2023
Taiwan	2018-2023
South Korea	2019-2023
China	2013-2023

Composition of Deferred Tax Assets and Liabilities Reconciled in Consolidated Balance Sheets

The composition of total deferred tax assets and liabilities reconciled to the classification in the Consolidated Balance Sheets is:

Deferred taxes (€, in millions)	January 1, 2023	Credits and other	Consolidated Statements  of Operations	Effect of changes in exchange rates	December 31, 2023
Deferred tax assets:
Capitalized R&D expenditures	592.1	—	(54.5)	(23.5)	514.1
Goodwill	—	—	65.0	—	65.0
R&D & other tax credit carry forwards	213.4	(28.1)	39.5	(7.0)	217.8
Inventories	45.2	—	17.6	(1.4)	61.4
Contract liabilities	820.8	—	174.4	(35.4)	959.8
Accrued and other liabilities1	113.9	—	30.5	(4.9)	139.5
Operating loss carry forwards	4.5	—	0.2	(0.8)	3.9
Property, plant and equipment	18.9	—	10.7	(0.4)	29.2
Lease liabilities	27.4	—	2.3	(1.0)	28.7
Other intangible assets	124.8	—	(5.5)	—	119.3
Share-based payments	11.4	—	5.9	(0.5)	16.8
Other temporary differences	23.3	—	(6.6)	5.8	22.5
Total deferred tax assets, gross	1,995.7	(28.1)	279.5	(69.1)	2,178.0
Valuation allowance2	(215.4)	—	3.0	5.7	(206.7)
Total deferred tax assets, net	1,780.3	(28.1)	282.5	(63.4)	1,971.3
Deferred tax liabilities:
Other intangible assets	(65.4)	—	10.9	2.5	(52.0)
Goodwill	(28.8)	—	(9.7)	—	(38.5)
Inventories	—	—	(4.1)	0.3	(3.8)
Right-of-use assets	(27.4)	—	(2.3)	1.0	(28.7)
Property, plant and equipment	(9.8)	—	(5.1)	1.3	(13.6)
Accrued and other liabilities	—	—	(0.5)	—	(0.5)
Contract liabilities	(16.3)	—	(64.2)	0.5	(80.0)
Long-term debt	(1.5)	—	(0.1)	—	(1.6)
Other temporary differences	(9.8)	—	9.8	(2.9)	(2.9)
Total deferred tax liabilities	(159.0)	—	(65.3)	2.7	(221.6)
Net deferred tax assets (liabilities)	1,621.3	(28.1)	217.2	(60.7)	1,749.7
Classified as:
Deferred tax assets – non-current	1,672.8				1,872.3
Deferred tax liabilities – non-current	(51.5)				(122.6)
Net deferred tax assets (liabilities)	1,621.3				1,749.7

1.For presentation purposes the 'standard warranty reserve' under the deferred tax assets has been classified as part of the 'Accrued and other liabilities' as of 2023. Comparative figures have been updated accordingly.

2.The valuation allowance disclosed above relates to R&D and other tax credit carry forwards and operating loss carry forwards that may not be realized.

Deferred taxes (€, in millions)	January 1, 2022	Credits and other	Consolidated Statements  of Operations	Income tax recognized in Other Comprehensive Income	Effect of changes in exchange rates	December 31, 2022
Deferred tax assets:
Capitalized R&D expenditures	420.4	—	151.2	—	20.5	592.1
R&D & other tax credit carry forwards	162.7	23.7	20.6	—	6.4	213.4
Inventories	31.5	—	12.5	—	1.2	45.2
Contract liabilities	423.2	—	400.8	—	(3.2)	820.8
Accrued and other liabilities1	109.4	—	0.3	—	4.2	113.9
Operating loss carry forwards	7.4	—	(2.8)	—	(0.1)	4.5
Property, plant and equipment	18.6	—	1.7	—	(1.4)	18.9
Lease liabilities	23.2	—	3.1	—	1.1	27.4
Other intangible assets	143.5	—	(18.7)	—	—	124.8
Share-based payments	9.6	—	1.2	—	0.6	11.4
Other temporary differences	27.5	—	3.7	(6.5)	(1.4)	23.3
Total deferred tax assets, gross	1,377.0	23.7	573.6	(6.5)	27.9	1,995.7
Valuation allowance2	(167.6)	—	(41.2)	—	(6.6)	(215.4)
Total deferred tax assets, net	1,209.4	23.7	532.4	(6.5)	21.3	1,780.3
Deferred tax liabilities:
Other intangible assets	(79.9)	—	19.8	—	(5.3)	(65.4)
Goodwill	(20.9)	—	(7.9)	—	—	(28.8)
Right-of-use assets	(23.2)	—	(3.1)	—	(1.1)	(27.4)
Property, plant and equipment	(10.9)	—	1.5	—	(0.4)	(9.8)
Contract liabilities	(7.9)	—	(8.4)	—	—	(16.3)
Long-term debt	(1.5)	—	—	—	—	(1.5)
Other temporary differences	(1.1)	—	(7.5)	(2.1)	0.9	(9.8)
Total deferred tax liabilities	(145.4)	—	(5.6)	(2.1)	(5.9)	(159.0)
Net deferred tax assets (liabilities)	1,064.0	23.7	526.8	(8.6)	15.4	1,621.3
Classified as:
Deferred tax assets – non-current	1,098.7					1,672.8
Deferred tax liabilities – non-current	(34.7)					(51.5)
Net deferred tax assets (liabilities)	1,064.0					1,621.3

1.For presentation purposes the 'standard warranty reserve' under the deferred tax assets has been classified as part of the 'Accrued and other liabilities' as of 2023. Comparative figures have been updated accordingly.

2.The valuation allowance disclosed above relates to R&D and other tax credit carry forwards and operating loss carry forwards that may not be realized.