Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

US and foreign component of income (loss) before income tax

The U.S. and foreign components of income (loss) before provision for (benefit from) income taxes for the years ended December 31, 2019, 2020 and 2021 are as follows (in millions):


	Year Ended December 31,
	2019		2020		2021
U.S.	$	(4,926)	$	(3,518)	$	(340)
Foreign	(3,507)		(3,428)		(685)
Loss before income taxes and loss from equity method investments	$	(8,433)	$	(6,946)	$	(1,025)

Components of income tax expense

The components of the provision for (benefit from) income taxes for the years ended December 31, 2019, 2020 and 2021 are as follows (in millions):


	Year Ended December 31,
	2019		2020		2021
Current
Federal	$	1	$	—	$	—
State	—		11		4
Foreign	132		63		196
Total current tax expense	$	133	$	74	$	200
Deferred
Federal	(77)		(97)		(76)
State	8		(7)		19
Foreign	(19)		(162)		(635)
Total deferred tax expense (benefit)	(88)		(266)		(692)
Total provision for (benefit from) income taxes	$	45	$	(192)	$	(492)

Reconciliation of the statutory federal income tax rate

The following is a reconciliation of the statutory federal income tax rate to our effective tax rate for the years ended December 31, 2019, 2020 and 2021:


	Year Ended December 31,
	2019		2020		2021
Federal statutory income tax rate	21.0	%	21.0	%	21.0	%
State income tax expense	(0.1)		(0.1)		(2.3)
Foreign rate differential	(3.8)		10.8		10.3
Non-deductible expenses	(1.3)		(1.3)		(5.2)
Stock-based compensation	1.2		1.3		4.5
Interest on convertible notes	(0.3)		—		(0.1)
Gain on convertible notes	1.1		—		—
Federal research and development credits	3.1		2.9		7.8
Deferred tax on investments (1)	—		0.9		48.7
Entity restructuring (2)	92.3		(1.7)		(2.0)
Change in unrecognized tax benefits	(17.0)		(3.7)		(27.8)
Valuation allowance	(97.3)		(45.8)		(33.7)
US tax on foreign income	(1.6)		—		(10.8)
Tax rate change	—		14.4		22.4
Other interest	1.8		3.2		16.8
Other, net	0.4		0.9		(1.6)
Effective income tax rate	(0.5)	%	2.8	%	48.0	%

(1) The 2020 rate impact for “Deferred tax on investments” was primarily driven by the deferred U.S. tax impact and the deferred China tax impact of the impairment charge related to our investment in Didi.

The 2021 rate impact for “Deferred tax on investments” was primarily driven by the deferred China and U.S. tax impact related to our investment in Didi and the deferred U.S. tax impact related to our investments in Aurora, Grab, and Zomato.

(2) The 2019 rate impact for “Entity restructuring” is related to a series of transactions resulting in changes to our international legal structure, including a redomiciliation of a subsidiary to the Netherlands and a transfer of certain intellectual property rights among wholly owned subsidiaries, primarily to align its evolving operations. The redomiciliation resulted in a step-up in the tax basis of intellectual property rights and a correlated increase in foreign deferred tax assets in an amount of $6.4 billion, net of a reserve for uncertain tax positions of $1.4 billion (refer to the 2019 rate impact for “Change in unrecognized tax benefits”). Based on available objective evidence, management believed it was not more-likely-than-not that these additional foreign deferred tax assets will be realizable as of December 31, 2019 and, therefore, were offset by a full valuation allowance (refer to the 2019 rate impact for “Valuation allowance”) to the extent not offset by reserves for uncertain tax positions. The corresponding deferred tax asset and valuation allowance balance were included in the “Fixed assets and intangible assets” and “Valuation allowance” lines, respectively, in the table below.

Deferred tax assets and liabilities

The components of deferred tax assets and liabilities as of December 31, 2020 and 2021 are as follows (in millions):


	As of December 31,
	2020		2021
Deferred tax assets
Net operating loss carryforwards	$	4,949	$	5,992
Research and development credits	857		1,020
Stock-based compensation	125		66
Accruals and reserves	227		290
Accrued legal	95		119
Fixed assets and intangible assets	6,936		6,753
Investment in partnership	254		—
Lease liability	460		455
Interest limitation carryforwards	562		629
Other	58		107
Total deferred tax assets	14,523		15,431
Less: Valuation allowance	(13,410)		(13,920)
Total deferred tax assets, net of valuation allowance	1,113		1,511
Deferred tax liabilities
Indefinite lived deferred tax liability (1)	1,502		1,451
ROU assets	322		334
Other	68		29
Total deferred tax liabilities	1,892		1,814
Net deferred tax liabilities	$	779	$	303

(1) The $1.5 billion indefinite-lived deferred tax liability represents the deferred U.S. income tax expense, which will be incurred upon the eventual disposition of the shares underlying our investments in Didi, Aurora, Grab, and Zomato. The current year tax expense and any subsequent changes in the recognition or measurement of this deferred tax liability will be recorded in continuing operations.

Changes in gross unrecognized tax benefits

The following table reflects changes in gross unrecognized tax benefits (in millions):


	Year Ended December 31,
	2019		2020		2021
Unrecognized tax benefits at beginning of year	$	394	$	1,797	$	2,293
Gross increases - current year tax positions	1,566		353		239
Gross increases - prior year tax positions	16		191		134
Gross decreases - prior year tax positions	(36)		(48)		(9)
Gross decreases - settlements with tax authorities	(143)		—		—
Unrecognized tax benefits at end of year	$	1,797	$	2,293	$	2,657

Schedule of open tax years for major tax jurisdictions

As of December 31, 2021, the open tax years for our major tax jurisdictions are as follows:


Jurisdiction						Tax Years
U.S. Federal						2011 - 2021
U.S. States						2004 - 2021
Brazil						2016 - 2021
Netherlands						2018 - 2021
Australia						2017 - 2021