v3.26.1
Income Taxes
 12 Months Ended
Apr. 24, 2026
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
As a result of the prospective adoption of ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, certain tables are presented in a different format not comparable to prior year disclosures, and certain data contained within the tables may be presented differently than in prior years. In conjunction with the prospective adoption of ASU 2023-09, the fiscal year 2026 disclosures include using Ireland, and its statutory tax rate of 12.5%, as the starting point for several disclosures as it is the Company's country of domicile; which now represents the 2026 Domestic amounts below.
The income tax provision is based on income before income taxes reported for financial statement purposes. The components of income before income taxes, based on tax jurisdiction, are as follows:
Fiscal Year
(in millions)2026
Domestic (Ireland)$746 
Foreign5,390 
Income before income taxes$6,136 
The following table presents the required disclosures prior to the Company’s adoption of ASU 2023-09:
 Fiscal Year
(in millions)20252024
Domestic (U.S.)$1,037 $750 
International4,591 4,087 
Income before income taxes$5,628 $4,837 
The income tax provision consists of the following:
Fiscal Year
(in millions)2026
Current tax expense:
Domestic (Ireland)$155 
Foreign1,113 
Total current tax expense1,268 
Deferred tax (benefit) expense:
Domestic (Ireland)(123)
Foreign154 
Net deferred tax expense31 
Income tax provision$1,299 
 Fiscal Year
(in millions)20252024
Current tax expense:  
Domestic (U.S.)$583 $756 
International692 905 
Total current tax expense1,275 1,661 
Deferred tax (benefit) expense:
Domestic (U.S.)(322)(435)
International(17)(93)
Net deferred tax benefit(339)(528)
Income tax provision
$936 $1,133 
Tax assets (liabilities), shown before jurisdictional netting of deferred tax assets (liabilities), are comprised of the following:
(in millions)April 24, 2026April 25, 2025
Deferred tax assets:  
Net operating loss, capital loss, and credit carryforwards$11,076 $11,252 
Intangible assets2,975 2,800 
Capitalization of research and development1,340 1,420 
Other accrued liabilities408 450 
Accrued compensation407 363 
Stock-based compensation152 149 
Inventory148 144 
Deferred revenue121 213 
Lease obligations 184 165 
Federal and state benefit on uncertain tax positions20 32 
Interest limitation250 479 
Unrealized gain on available-for-sale securities and derivative financial instruments80 56 
Other387 421 
Gross deferred tax assets17,548 17,946 
Valuation allowance(12,338)(12,668)
Total deferred tax assets5,2105,277
Deferred tax liabilities:  
Intangible assets(1,125)(1,238)
Realized loss on derivative financial instruments(72)(67)
Right of use leases(178)(159)
Accumulated depreciation(165)(114)
Outside basis difference of subsidiaries(89)(71)
Pension and post-retirement benefits(105)(35)
Other(101)(90)
Total deferred tax liabilities(1,834)(1,773)
Prepaid income taxes701 719 
Income tax receivables 665 464 
Tax assets, net$4,742 $4,687 
Reported as (after valuation allowance and jurisdictional netting):  
Other current assets$1,160 $1,050 
Tax assets3,943 4,040 
Deferred tax liabilities(362)(403)
Tax assets, net$4,742 $4,687 
No material deferred taxes have been provided on the undistributed earnings of the Company’s subsidiaries at April 24, 2026 and April 25, 2025 since these earnings have been, and under current plans will continue to be, permanently reinvested in these subsidiaries. Due to the number of legal entities and jurisdictions involved, the complexity of the legal entity structure of the Company, and the complexity of the tax laws in the relevant jurisdictions, the Company believes it is not practicable to estimate, within any reasonable range, the amount of additional taxes which may be payable upon distribution of the undistributed earnings.
At April 24, 2026, the Company had approximately $10.7 billion of tax effected net operating loss carryforwards in certain U.S. and non-U.S. jurisdictions, of which $4.7 billion have no expiration, and the remaining $6.0 billion will expire during fiscal years 2027 through 2046. Included in these net operating loss carryforwards are $3.9 billion of tax effected net operating losses generated in fiscal year 2008 as a result of the receipt of a favorable tax ruling from certain non-U.S. taxing authorities; and $5.0 billion of tax effected net operating losses
generated during fiscal year 2023 as a result of an intercompany reorganization in certain non-U.S. jurisdictions. The Company has recorded a full valuation allowance against these net operating losses. Certain of the remaining net operating loss carryforwards of $1.8 billion also have a valuation allowance recorded against them, as management does not believe that it is more likely than not that these net operating losses will be utilized.
At April 24, 2026, the Company also had $319 million of tax credits available to reduce future income taxes payable, of which $136 million have no expiration. The remaining credits will expire during fiscal years 2027 through 2042.
The Company has established valuation allowances of $12.3 billion and $12.7 billion at April 24, 2026 and April 25, 2025, respectively, primarily related to the uncertainty of the utilization of certain deferred tax assets which are primarily comprised of tax loss and credit carryforwards in various jurisdictions. The decrease in the valuation allowance during fiscal year 2026 is primarily related to current year utilization of attributes with a full valuation allowance due to certain intercompany transactions. These valuation allowances would result in a reduction to the income tax provision in the consolidated statements of income if they are ultimately not required.
Below is the reconciliation of income taxes from the Ireland statutory rate of 12.5% to the consolidated effective income tax rate and associated dollar impact for fiscal year 2026. In determining the reconciling items, we considered the effect of tax rulings as part of the statutory tax rate.
(in millions)Fiscal Year 2026
Ireland statutory tax rate$767 12.5 %
Effect of cross-border tax laws111 1.8 %
Other
Intercompany transaction(s)(165)(2.7)%
Other rate impacting items29 0.5 %
Foreign tax effects
United States
Statutory tax rate differential105 1.7 %
State and local income taxes82 1.3 %
US tax on foreign earnings46 0.7 %
R&D credit(101)(1.6)%
Intercompany transaction(s)278 4.5 %
Prior year tax resolutions65 1.1 %
Changes in valuation allowances(48)(0.8)%
Other rate impacting items85 1.4 %
Luxembourg
Changes in valuation allowances(263)(4.3)%
Affiliate financing177 2.9 %
Intercompany transaction(s)101 1.6 %
Other rate impacting items1 — %
Puerto Rico
Statutory tax rate differential(80)(1.3)%
Switzerland
Statutory tax rate differential(70)(1.1)%
Cantonal income taxes125 2.0 %
Other rate impacting items23 0.4 %
Other foreign jurisdictions
Statutory tax rate differential92 1.5 %
Other rate impacting items41 0.7 %
Changes in unrecognized tax benefits(102)(1.7)%
Effective tax rate$1,299 21.2 %
The following table presents the required disclosures prior to the Company’s adoption of ASU 2023-09 and reconciles the U.S. federal statutory income tax amount to the actual global effective amount for the fiscal years 2025 and 2024:
 Fiscal Year
(in millions)20252024
U.S. federal statutory tax rate21.0 %21.0 %
Increase (decrease) in tax rate resulting from:
U.S. state taxes, net of federal tax benefit0.7 0.2 
Research and development credit(1.8)(2.2)
International(6.5)(6.7)
Stock based compensation0.3 0.3 
Uncertain tax positions and interest1.4 1.3 
Base erosion anti-abuse tax— 0.3 
Foreign derived intangible income benefit(1.5)(1.7)
Certain tax adjustments1.1 6.2 
U.S. tax on foreign earnings1.5 3.5 
Other, net0.4 1.2 
Effective tax rate16.6 %23.4 %
Worldwide income tax payments, net of tax refunds, are as follows:
Fiscal Year
(in millions)2026
Ireland$99 
Foreign
United States974 
Switzerland320 
Israel119 
   Other foreign430 
Total income taxes paid$1,942 
Fiscal Year
20252024
Total income taxes paid$1,819 $1,622 
On July 4, 2025, the U.S. Government enacted The One Big Beautiful Bill Act of 2025, which includes, among other provisions, changes to the U.S. corporate income tax system including the allowance of immediate expensing of qualifying research and development expenses and permanent extensions of certain provisions within the Tax Cuts and Jobs Act. The provisions of the Act, including immediate expensing of qualifying research and development costs, that were effective for fiscal year 2026 did not materially impact the Company's fiscal year 2026 effective tax rate. The Company does not expect the provisions of the Act to materially impact fiscal years 2027 and beyond.
The Organization for Economic Co-operation and Development (OECD) published Pillar Two Model Rules defining the global minimum tax, which calls for the taxation of large multinational corporations at a minimum rate of 15% in each jurisdiction in which the group operates. The OECD has since issued administrative guidance providing transition and safe harbor rules around the implementation of the Pillar Two Global Minimum Tax. A number of countries, including Ireland, have enacted legislation to implement the core elements of Pillar Two, which were effective for the Company in fiscal year 2025.
During fiscal year 2026, the cost from certain tax adjustments of $260 million, recognized in income tax provision in the consolidated statements of income included the following:
•A net cost of $150 million associated with the intercompany sale of intellectual property and the establishment of a deferred tax asset.
•A net cost of $70 million associated with the separation of the Diabetes Business.
•A cost of $66 million associated with the amortization of the previously established deferred tax assets from intercompany intellectual property transactions.
•A benefit of $51 million related to a change in estimate of accrued interest on uncertain tax positions.
•A cost of $25 million primarily related to the write off of certain deferred tax assets on previous transactions.
During fiscal year 2025, the net cost from certain tax adjustments of $62 million, recognized in income tax provision in the consolidated statements of income, relates to amortization of the previously established deferred tax assets from intercompany intellectual property transactions.
During fiscal year 2024, the net benefit from certain tax adjustments of $299 million, recognized in income tax provision in the consolidated statements of income, included the following:
•A cost of $187 million associated with a reserve adjustment related to the Israeli Central-Lod District Court decision with respect to a deemed taxable transfer of intellectual property.
•A cost of $124 million related to a change in valuation allowance on previously recorded net operating losses.
•A benefit of $95 million related to a Swiss Cantonal tax rate change on previously recorded deferred tax assets.
•A cost of $50 million associated with the amortization of the previously established deferred tax assets from intercompany intellectual property transactions.
•A cost of $33 million associated with a change in the Company’s permanent reinvestment assertion on certain historical earnings.
Currently, the Company’s operations in Puerto Rico, Singapore, Dominican Republic, Costa Rica, and China have various tax holidays and tax incentive grants. The tax reductions, inclusive of Pillar Two global minimum tax impacts, as compared to the local statutory rate favorably impacted earnings by $214 million, $294 million, and $229 million in fiscal years 2026, 2025, and 2024, respectively, and diluted earnings per share by $0.17, $0.23, and $0.17, in fiscal years 2026, 2025, and 2024, respectively. The tax holidays are conditional upon the Company meeting certain thresholds required under statutory law. The tax incentive grants, unless extended, will expire between fiscal years 2027 and 2049. The tax incentive grants which expired during fiscal year 2026 did not have a material impact on the Company's consolidated financial statements.
The Company had $3.0 billion, $2.9 billion, and $2.8 billion of gross unrecognized tax benefits at April 24, 2026, April 25, 2025, and April 26, 2024, respectively. A reconciliation of the beginning and ending amount of unrecognized tax benefits for fiscal years 2026, 2025, and 2024 is as follows:
 Fiscal Year
(in millions)202620252024
Gross unrecognized tax benefits at beginning of fiscal year$2,902 $2,824 $2,682 
Gross increases:  
Prior year tax positions81 13 121 
Current year tax positions101 93 85 
Gross decreases:  
Prior year tax positions(10)(8)(2)
Settlements(105)(5)(55)
Statute of limitation lapses(17)(15)(7)
Gross unrecognized tax benefits at end of fiscal year2,951 2,902 2,824 
Cash advance paid to taxing authorities(934)(934)(934)
Gross unrecognized tax benefits at end of fiscal year, net of cash advance$2,017 $1,968 $1,890 
If all of the Company’s unrecognized tax benefits at April 24, 2026, April 25, 2025, and April 26, 2024 were recognized, $2.7 billion would impact the Company’s effective tax rate, respectively for each of the three years. Although the Company believes that it has adequately reserved for liabilities resulting from tax assessments by taxing authorities, positions taken by these tax authorities could have a material impact on the Company’s effective tax rate in future periods. The Company has recorded gross unrecognized tax benefits, net of cash advance, of $2.0 billion as a noncurrent liability.
The Company recognizes interest and penalties related to income tax matters in income tax provision in the consolidated statements of income and records the liability in the current or noncurrent accrued income taxes in the consolidated balance sheets, as appropriate. During fiscal year 2026, the Company recognized a decrease in gross interest expense of $57 million in income tax provision in the consolidated statements of income. During fiscal years 2025 and 2024, the Company recognized gross interest expense of $55 million, and $134 million, respectively, in income tax provision in the consolidated statements of income. The Company had interest and penalties net receivable of $22 million at April 24, 2026. The Company had $74 million of accrued gross interest and penalties at April 25, 2025.
The Company reserves for uncertain tax positions related to unresolved matters with the IRS and other taxing authorities. These reserves are subject to a high degree of estimation and management judgment. Resolution of these material unresolved matters, or positions taken by the IRS or other tax authorities during future tax audits, could have a material impact on the Company’s financial results in future periods. The Company continues to believe that its reserves for uncertain tax positions are appropriate and that it has meritorious defenses for its tax filings and will vigorously defend them during the audit process, appellate process, and through litigation in courts, as necessary.
The major tax jurisdictions where the Company conducts business which remain subject to examination are Ireland for years 2022 forward, United States for 2005 forward and various other jurisdictions that are open for examination 2010 forward. See Note 18 for additional information regarding the status of current tax audits and proceedings.