Income Taxes |
6 Months Ended |
|---|---|
Jun. 30, 2025 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | Income Taxes Liberty Global is a Bermuda exempted company limited by shares and is not considered to be a tax resident in any other jurisdiction or country. On December 27, 2023, Bermuda enacted the Corporate Income Tax Act 2023 (the CIT Act) which provides for the taxation of the Bermuda constituent entities of certain large multinational groups beginning on or after January 1, 2025. Prior to 2025, we used the U.K. statutory rate to compute our “expected” income tax benefit or expense, as management considered this rate to be more meaningful given that Bermuda did not impose an income tax in those periods. As the CIT Act is now in effect, we will use the Bermuda statutory rate of 15.0% to compute our expected income tax benefit or expense for 2025 and all future periods. The effective tax rate for the three months ended June 30, 2025 was 0.0% (income tax expense of $0.9 million), which differs from the Bermuda statutory rate of 15.0% (income tax benefit of $415.9 million). This difference is primarily due to the negative impacts of (i) non-deductible net foreign exchange losses in the U.K. of $594.9 million (21.5%) and (ii) non-deductible net losses from investments in certain subsidiaries and affiliates in the U.K. and the Netherlands of $69.5 million (2.5%). The negative impacts of these items were partially offset by the net positive impact of statutory rates in certain jurisdictions in which we operate that are different than the Bermuda statutory rate, including $259.7 million (9.4%) in the U.K. The effective tax rate for the six months ended June 30, 2025 was 1.7% (income tax benefit of $69.1 million), which differs from the Bermuda statutory rate of 15.0% (income tax benefit of $624.9 million). This difference is primarily due to the negative impacts of (i) non-deductible net foreign exchange losses in the U.K. of $903.1 million (21.7%) and (ii) non-deductible net losses from investments in certain subsidiaries and affiliates in the U.K. and the Netherlands of $112.8 million (2.7%). The negative impacts of these items were partially offset by the net positive impacts of (a) statutory rates in certain jurisdictions in which we operate that are different than the Bermuda statutory rate, including $392.3 million (9.4%) in the U.K., and (b) the release of valuation allowances in Luxembourg of $86.0 million (2.1%). The effective tax rate for the three months ended June 30, 2024 was 8.0% (income tax expense of $28.2 million), which differs from the U.K. statutory rate of 25.0% (income tax expense of $88.1 million). This difference is primarily due to the positive impacts of non-taxable net foreign exchange gains and non-taxable net income from investments in the U.K. of $49.0 million (13.9%) and $44.2 million (12.5%), respectively, partially offset by the net negative impact of certain non-taxable or non-deductible items in the U.K., Belgium and the Netherlands of $20.8 million (5.9%). The effective tax rate for the six months ended June 30, 2024 was 6.9% (income tax expense of $71.0 million), which differs from the U.K. statutory rate of 25.0% (income tax expense of $257.4 million). This difference is primarily due to the positive impacts of non-taxable net foreign exchange gains and non-taxable net income from investments in the U.K. of $212.9 million (20.7%) and $45.8 million (4.4%), respectively, partially offset by the net negative impact of certain non-taxable or non-deductible items in the Netherlands, the U.K. and Belgium of $49.9 million (4.8%). As of June 30, 2025, our unrecognized tax benefits were $308.6 million, of which $269.5 million would have a favorable impact on our effective income tax rate if ultimately recognized, after considering amounts that we would expect to be offset by valuation allowances and other factors. We and our subsidiaries file consolidated and standalone income tax returns in various jurisdictions. In the normal course of business, our income tax filings are subject to review by various taxing authorities. In connection with such reviews, disputes could arise with the taxing authorities over the interpretation or application of certain income tax rules related to our business in that tax jurisdiction. Such disputes may result in future tax and interest and penalty assessments by these taxing authorities. The ultimate resolution of tax contingencies will take place upon the earlier of (i) the settlement date with the applicable taxing authorities in either cash or agreement of income tax positions or (ii) the date when the tax authorities are statutorily prohibited from adjusting the company’s tax computations. In general, tax returns filed by our company or our subsidiaries for years prior to 2019 are no longer subject to examination by tax authorities. Certain of our subsidiaries are currently involved in income tax examinations in various jurisdictions in which we operate, including Belgium, Luxembourg and the U.S. While we do not expect adjustments from the foregoing examinations to have a material impact on our consolidated financial position, results of operations or cash flows, no assurance can be given that this will be the case given the amounts involved and the complex nature of the related issues. On October 7, 2022, the U.S. Department of Justice filed a suit against Liberty Global, Inc. (LGI), a wholly-owned U.S. subsidiary of Liberty Global, in the U.S. District Court of Colorado for unpaid federal income taxes and penalties for the 2018 tax year of approximately $284 million. This action by the U.S. Department of Justice is related to the November 2020 complaint filed by LGI in the U.S. District Court of Colorado seeking a refund of approximately $110 million of taxes, penalties and interest associated with the application of certain temporary treasury regulations issued in June 2019. In October 2023, the U.S. District Court of Colorado entered judgement against LGI with respect to the refund claim and we appealed this decision to the U.S. Court of Appeals for the Tenth Circuit (the Court of Appeals) in December 2023. No amounts have been accrued by LGI with respect to this matter. We continue to vigorously defend this matter and actively pursue our claim for refund. In January 2021, we petitioned the U.S. Tax Court with respect to unresolved issues related to our 2010 tax year for which we had already recognized an accrued liability for an uncertain tax position. In November 2023, we received an unfavorable decision, which we appealed to the Court of Appeals. In December 2023, we made a payment of the disputed tax in the amount of $315 million, which reduced our accrued liability for uncertain tax benefits on our consolidated balance sheet but will continue to be included in our inventory of unrecognized tax benefits as the position is not yet settled. We continue to vigorously defend our position, however, due to the inherent uncertainty involved in the litigation process, there can be no assurance that the Court of Appeals will rule in our favor.
|