v3.25.4
Taxes on Income (Tables)
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Schedule of Reconciliation Between Effective Tax Rate and U.S. Statutory Rate
A reconciliation between the effective income tax rate and the U.S. statutory rate (in accordance with the new guidance) for 2025 is as follows:
2025
AmountTax Rate
U.S. statutory rate applied to income before taxes$4,424 21.0 %
Differential arising from:
State and local income taxes, net of federal benefit (1)
12 0.1 
Foreign tax effects:
Switzerland
Tax rate differential between Switzerland and the U.S.(1,428)(6.8)
Withholding taxes284 1.3 
Other (2)
59 0.3 
Netherlands
Tax rate differential between Netherlands and the U.S.409 1.9 
Innovation box(1,042)(4.9)
Other(66)(0.3)
Other foreign jurisdictions308 1.5 
Effect of cross-border tax laws:
Net controlled foreign corporation tested income3,759 17.8 
Foreign-derived deduction-eligible income(31)(0.1)
Subpart F227 1.1 
Tax credits:
Foreign tax credits(4,190)(19.9)
Research and development tax credits(260)(1.2)
Valuation allowances76 0.4 
Nontaxable or nondeductible items(78)(0.4)
Changes in unrecognized tax benefits341 1.5 
$2,804 13.3 %
(1)    State and local tax expense was not material in 2025.
(2)    Includes the impact of Cantonal tax holiday and OECD Pillar 2.
A reconciliation between the effective income tax rate and the U.S. statutory rate (as previously reported in accordance with guidance prior to the adoption of the new accounting standard) for 2024 and 2023 is as follows:
 20242023
AmountTax RateAmountTax Rate
U.S. statutory rate applied to income before taxes
$4,186 21.0 %$397 21.0 %
Differential arising from:
Foreign earnings(1,301)(6.5)(941)(49.8)
Tax settlements and statute lapses
(557)(2.8)— — 
R&D tax credit(202)(1.0)(214)(11.3)
Inventory donations
(71)(0.4)(65)(3.5)
State taxes(39)(0.2)(117)(6.2)
Charges for certain research and development asset acquisitions
554 2.8 253 13.4 
Valuation allowances54 0.3 70 3.7 
Restructuring52 0.3 41 2.2 
GILTI and the foreign-derived intangible income deduction29 0.1 (80)(4.3)
Acquisition-related costs, including amortization
18 0.1 42 2.2 
Acquisition of Prometheus
— — 2,139 113.3 
Other80 0.4 (13)(0.7)
 $2,803 14.1 %$1,512 80.0 %
Where applicable, the impact of changes in uncertain tax positions is reflected in the reconciling items above.
Schedule of Income Before Taxes
Income before taxes consisted of:
Years Ended December 31202520242023
Domestic$(4,948)$(1,849)$(15,622)
Foreign26,015 21,785 17,511 
 $21,067 $19,936 $1,889 
Schedule of Taxes on Income
Taxes on income consisted of:
Years Ended December 31202520242023
Current provision
Federal$499 $944 $928 
Foreign4,072 3,123 2,435 
State(96)(15)48 
 4,475 4,052 3,411 
Deferred provision
Federal(1,585)(1,475)(1,559)
Foreign(83)212 (233)
State(3)14 (107)
 (1,671)(1,249)(1,899)
 $2,804 $2,803 $1,512 
Schedule of Deferred Income Taxes
Deferred income taxes at December 31 consisted of:
 20252024
AssetsLiabilitiesAssetsLiabilities
Product intangibles and licenses$140 $3,272 $71 $978 
R&D capitalization4,134 — 3,062 — 
Inventory related72 451 84 413 
Accelerated depreciation— 594 — 645 
Undistributed foreign earnings
119 338 275 371 
Equity investments— 155 — 90 
Pensions and other postretirement benefits117 623 224 400 
Compensation related382 — 400 — 
Unrecognized tax benefits160 — 152 — 
Net operating losses and other tax credit carryforwards1,197 — 910 — 
Other1,236 134 802 159 
Subtotal7,557 5,567 5,980 3,056 
Valuation allowance(824) (710) 
Total deferred taxes$6,733 $5,567 $5,270 $3,056 
Net deferred income taxes$1,166 $2,214 
Recognized as:
Other Assets$2,605 $3,601 
Deferred Income Taxes $1,439  $1,387 
Schedule of Income Taxes Paid
Income taxes paid in 2025 (presented in accordance with the new guidance) consisted of:
Year Ended December 31
2025
Domestic - federal (1)
$1,559 
Domestic - state and local
24 
Switzerland
2,115 
Netherlands
1,576 
Other foreign
812 
$6,086 
(1)    Includes TCJA transition tax payments.
Income taxes paid in 2024 and 2023 consisted of:
Years Ended December 3120242023
Domestic (1)
$974 $2,258 
Foreign2,954 2,080 
 $3,928 $4,338 
(1)    Includes TCJA transition tax payments.
Schedule of Unrecognized Tax Benefits
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
202520242023
Balance January 1$2,261 $2,384 $1,835 
Additions related to current year positions396 421 553 
Additions related to prior year positions59 35 91 
Reductions for tax positions of prior years
(94)(33)(20)
Settlements
(28)(18)(23)
Lapse of statute of limitations (1)
(64)(528)(52)
Balance December 31$2,530 $2,261 $2,384 
(1)    Amount in 2024 reflects a reduction of $451 million resulting from the expiration of the statute of limitations related to the 2019 and 2020 federal tax return years.