Income Taxes (Tables)

12 Months Ended

Sep. 30, 2019

U.S. and Non-U.S. Income Before Income Tax

The Company’s income before taxes by fiscal year consisted of the following:



	For the Years Ended September 30,
	2019		2018		2017
	(in millions)
U.S.	$	9,536	$	8,088	$	8,440
Non-U.S.	5,348		4,718		3,254
Total income before taxes	$	14,884	$	12,806	$	11,694

Comprehensive Income Tax (Expense) Benefit Components Table

Income tax provision by fiscal year consisted of the following:



	For the Years Ended September 30,
	2019		2018			2017
	(in millions)
Current:
U.S. federal	$	1,504	$	2,819		$	2,377
State and local	243		219			291
Non-U.S.	843		754			629
Total current taxes	2,590		3,792			3,297
Deferred:
U.S. federal	184		(1,214		)	1,607
State and local	28		(96		)	66
Non-U.S.	2		23			25
Total deferred taxes	214		(1,287		)	1,698
Total income tax provision	$	2,804	$	2,505		$	4,995

Components of Deferred Tax Assets and Liabilities

The tax effect of temporary differences that give rise to significant portions of deferred tax assets and liabilities at September 30, 2019 and 2018, are presented below:



	September 30,
	2019			2018
	(in millions)
Deferred Tax Assets:
Accrued compensation and benefits	$	117		$	135
Accrued litigation obligation	273			329
Client incentives	125			213
Net operating loss carryforwards	65			34
Comprehensive loss	33			17
Federal benefit of state taxes	148			120
Other	6			127
Valuation allowance	(69		)	(34		)
Deferred tax assets	698			941
Deferred Tax Liabilities:
Property, equipment and technology, net	(314		)	(286		)
Intangible assets	(4,983		)	(5,153		)
Foreign taxes	(184		)	(106		)
Deferred tax liabilities	(5,481		)	(5,545		)
Net deferred tax liabilities	$	(4,783	)	$	(4,604	)

Reconciliation of the US Statutory Federal Tax Rate

The income tax provision differs from the amount of income tax determined by applying the applicable U.S. federal statutory rate to pretax income, as a result of the following:



	For the Years Ended September 30,
	2019					2018					2017
	Dollars			Percent		Dollars			Percent		Dollars			Percent
	(in millions, except percentages)
U.S. federal income tax at statutory rate	$	3,126		21	%	$	3,141		25	%	$	4,093		35	%
State income taxes, net of federal benefit	223			2	%	201			2	%	200			2	%
Non-U.S. tax effect, net of federal benefit	(527		)	(4	)%	(465		)	(4	)%	(641		)	(5	)%
Transition tax on foreign earnings	—			—	%	1,147			9	%	—			—	%
Remeasurement of deferred tax balances	—			—	%	(1,133		)	(9	)%	—			—	%
Reorganization of Visa Europe and other legal entities	—			—	%	—			—	%	1,515			13	%
Other, net	(18		)	—	%	(386		)	(3	)%	(172		)	(2	)%
Income tax provision	$	2,804		19	%	$	2,505		20	%	$	4,995		43	%

Unrecognized Tax Benefits Reconciliation, Table

A reconciliation of beginning and ending unrecognized tax benefits by fiscal year is as follows:



	2019			2018			2017
	(in millions)
Balance at beginning of period	$	1,658		$	1,353		$	1,160
Increases of unrecognized tax benefits related to prior years	216			367			56
Decreases of unrecognized tax benefits related to prior years	(13		)	(233		)	(59		)
Increases of unrecognized tax benefits related to current year	384			172			197
Decreases related to settlements with taxing authorities	(9		)	—			—
Reductions related to lapsing statute of limitations	(2		)	(1		)	(1		)
Balance at end of period	$	2,234		$	1,658		$	1,353