Huntsman Corporation Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Note 19 - Income Taxes (Tables)

Note 19 - Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

	*Year ended December 31,*
	*2022*		*2021*			*2020*
Income tax expense (benefit):
U.S.
Current	$	6	$	118		$	(216	)
Deferred		57		(70	)		167
Non-U.S.
Current		91		112			83
Deferred		32		31			8
Total	$	186	$	191		$	42

	*Year ended December 31,*
	*2022*		*2021*			*2020*
Income tax expense (benefit):
U.S.
Current	$	6	$	120		$	(215	)
Deferred		59		(71	)		166
Non-U.S.
Current		91		112			83
Deferred		32		31			8
Total	$	188	$	192		$	42

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

	*Year ended December 31,*
	*2022*			*2021*			*2020*
Income from continuing operations before income taxes	$	697		$	1,246		$	331

Expected tax expense at U.S. statutory rate of 21%	$	146		$	261		$	70
Change resulting from:
State tax expense, net of federal benefit		3			15			(4	)
Non-U.S. tax rate differentials		8			16			16
Other non-U.S. tax effects, including nondeductible expenses and other withholding taxes		(10	)		16			4
Venator investment basis difference and fair market value adjustments		—			(29	)		—
Change in valuation allowance on capital loss related to Venator investment		—			(28	)		—
Non-U.S. income subject to U.S. tax not offset by U.S. foreign tax credits		3			(19	)		7
Tax authority audits and dispute resolutions		6			4			—
Change in valuation allowance		38			(9	)		(14	)
Deferred tax effects of non-U.S. tax rate changes		(2	)		(3	)		(2	)
Impact of equity method investments		(21	)		(37	)		(10	)
Sale of the India-based DIY business		—			(4	)		(35	)
Non-U.S. withholding tax on repatriated earnings, net of U.S. foreign tax credits		17			14			19
Other U.S. tax effects, including nondeductible expenses and other credits		(2	)		(6	)		(9	)
Total income tax expense	$	186		$	191		$	42

	*Year ended December 31,*
	*2022*			*2021*			*2020*
Income from continuing operations before income taxes	$	700		$	1,250		$	332

Expected tax expense at U.S. statutory rate of 21%	$	146		$	261		$	70
Change resulting from:
State tax expense, net of federal benefit		3			15			(4	)
Non-U.S. tax rate differentials		8			16			16
Other non-U.S. tax effects, including nondeductible expenses and other withholding taxes		(10	)		16			4
Venator investment basis difference and fair market value adjustments		—			(29	)		—
Change in valuation allowance on capital loss related to Venator investment		—			(28	)		—
Non-U.S. income subject to U.S. tax not offset by U.S. foreign tax credits		3			(19	)		7
Tax authority audits and dispute resolutions		6			4			—
Change in valuation allowance		38			(9	)		(14	)
Deferred tax effects of non-U.S. tax rate changes		(2	)		(3	)		(2	)
Impact of equity method investments		(21	)		(37	)		(10	)
Sale of the India-based DIY business		—			(4	)		(35	)
Non-U.S. withholding tax on repatriated earnings, net of U.S. foreign tax credits		17			14			19
Other U.S. tax effects, including nondeductible expenses and other credits		—			(5	)		(9	)
Total income tax expense	$	188		$	192		$	42

Schedule of Income before Income Tax, Domestic and Foreign [Table Text Block]

	*Year ended December 31,*
	*2022*		*2021*		*2020*
U.S.	$	273	$	530	$	(231	)
Non-U.S.		424		716		562
Total	$	697	$	1,246	$	331

	*Year ended December 31,*
	*2022*		*2021*		*2020*
U.S.	$	276	$	534	$	(230	)
Non-U.S.		424		716		562
Total	$	700	$	1,250	$	332

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

	*December 31,*
	*2022*			*2021*
Deferred income tax assets:
Net operating loss carryforwards	$	220		$	221
Operating leases		100			106
Pension and other employee compensation		65			110
Deferred interest		49			35
Basis difference in Venator investment		45			42
Capitalized research and development costs		30			9
Property, plant and equipment		25			19
Intangible assets		24			28
Intercompany prepayments (FDII related)		9			56
Other, net		45			26
Total	$	612		$	652
Deferred income tax liabilities:
Property, plant and equipment	$	(263	)	$	(234	)
Operating leases		(102	)		(105	)
Intangible assets		(83	)		(94	)
Pension and other employee compensation		(47	)		(36	)
Outside basis difference in subsidiaries		(31	)		(17	)
Unrealized currency gains		(11	)		(6	)
Other, net		(9	)		(10	)
Total	$	(546	)	$	(502	)
Net deferred tax asset before valuation allowance	$	66		$	150
Valuation allowance—net operating losses and other		(169	)		(131	)
Net deferred tax (liability) asset	$	(103	)	$	19
Non-current deferred tax asset	$	147		$	180
Non-current deferred tax liability		(250	)		(161	)
Net deferred tax (liability) asset	$	(103	)	$	19

	*December 31,*
	*2022*			*2021*
Deferred income tax assets:
Net operating loss carryforwards	$	220		$	221
Operating leases		100			106
Pension and other employee compensation		65			110
Deferred interest		49			35
Basis difference in Venator investment		45			42
Capitalized research and development costs		30			9
Property, plant and equipment		25			19
Intangible assets		24			28
Intercompany prepayments (FDII related)		9			56
Other, net		45			26
Total	$	612		$	652
Deferred income tax liabilities:
Property, plant and equipment	$	(263	)	$	(234	)
Operating leases		(102	)		(105	)
Intangible assets		(83	)		(94	)
Pension and other employee compensation		(47	)		(36	)
Outside basis difference in subsidiaries		(31	)		(17	)
Unrealized currency gains		(11	)		(6	)
Other, net		(13	)		(12	)
Total	$	(550	)	$	(504	)
Net deferred tax asset before valuation allowance	$	62		$	148
Valuation allowance—net operating losses and other		(169	)		(131	)
Net deferred tax (liability) asset	$	(107	)	$	17
Non-current deferred tax asset	$	147		$	180
Non-current deferred tax liability		(254	)		(163	)
Net deferred tax (liability) asset	$	(107	)	$	17

Summary of Valuation Allowance [Table Text Block]

	*2022*			*2021*			*2020*
Valuation allowance as of January 1	$	131		$	206		$	231
Valuation allowance as of December 31		169			131			206
Net (increase) decrease		(38	)		75			25
Foreign currency movements		(4	)		(4	)		6
Decrease to deferred tax assets with no impact on operating tax expense, including an offsetting (decrease) increase to valuation allowances		4			(62	)		(17	)
Change in valuation allowance per rate reconciliation	$	(38	)	$	9		$	14
Components of change in valuation allowance affecting tax expense:
Pre-tax income and losses in jurisdictions with valuation allowances resulting in no tax expense or benefit	$	13		$	13		$	14
Releases of valuation allowances in various jurisdictions		—			2			—
Establishments of valuation allowances in various jurisdictions		(51	)		(6	)		—
Change in valuation allowance per rate reconciliation	$	(38	)	$	9		$	14

	*2022*			*2021*			*2020*
Valuation allowance as of January 1	$	131		$	206		$	231
Valuation allowance as of December 31		169			131			206
Net (increase) decrease		(38	)		75			25
Foreign currency movements		(4	)		(4	)		6
Decrease to deferred tax assets with no impact on operating tax expense, including an offsetting (decrease) increase to valuation allowances		4			(62	)		(17	)
Change in valuation allowance per rate reconciliation	$	(38	)	$	9		$	14
Components of change in valuation allowance affecting tax expense:
Pre-tax income and losses in jurisdictions with valuation allowances resulting in no tax expense or benefit	$	13		$	13		$	14
Releases of valuation allowances in various jurisdictions		—			2			—
Establishments of valuation allowances in various jurisdictions		(51	)		(6	)		—
Change in valuation allowance per rate reconciliation	$	(38	)	$	9		$	14

Schedule of Unrecognized Tax Benefits Roll Forward [Table Text Block]

	*2022*			*2021*
Unrecognized tax benefits as of January 1	$	48		$	16
Gross increases and decreases—tax positions taken during a prior period		6			30
Gross increases and decreases—tax positions taken during the current period		4			2
Reductions resulting from the lapse of statutes of limitation		—			(1	)
Foreign currency movements		(1	)		1
Unrecognized tax benefits as of December 31	$	57		$	48

Schedule of Unrecognized Tax Benefits, Income Tax Penalties and Interest Recognized in Financial Statement [Table Text Block]

	*Year ended December 31,*
	*2022*		*2021*		*2020*
Interest included in tax expense	$	3	$	1	$	1
Penalties included in tax expense		—		—		—

	*December 31,*
	*2022*		*2021*
Accrued liability for interest	$	8	$	6
Accrued liability for penalties		—		—

Summary of Open Tax Years [Table Text Block]

Tax jurisdiction		*Open tax years*
Belgium		2020 and later
China		2011 and later
France		2020 and later
Germany		2016 and later
Hong Kong		2015 and later
India		2006 and later
Italy		2016 and later
Japan		2022 and later
Mexico		2016 and later
Spain		2012 and later
Switzerland		2016 and later
The Netherlands		2020 and later
Thailand		2013 and later
United Kingdom		2019 and later
United States federal		2017 and later