AAPL · 10-K · 2025A · Full report

Income Tax Rate Changes

Apple Inc. · 2025-10-31 · Importance 26 · Surprise 24 · In source text

Apple reports an effective tax rate of 15.6% for fiscal 2025 and notes the rate was lower than the U.S. statutory rate primarily due to a lower effective tax rate on foreign earnings, changes in unrecognized tax benefits, the U.S. federal R&D credit and share‑based compensation benefits, partially offset by a valuation allowance change and state taxes. Management discloses a $10.7 billion year‑over‑year decrease in the provision for income taxes related to the State Aid Decision as a key driver of the lower provision in 2025 versus 2024. The provision change represents a greater than 10% year‑over‑year movement in the tax provision and is material to the effective tax rate and net income for FY2025.

Key facts

• As of September 27, 2025, the balance of the deemed repatriation tax payable under TCJA was $8.8 billion, payable within 12 months. source
• The Company’s effective tax rate for 2025 was lower compared to 2024 due to a $10.7 billion year-over-year decrease in the provision for income taxes related to the State Aid Decision and the impact of changes in unrecognized tax benefits, partially offset by a change in valuation allowance and a higher effective tax rate on foreign earnings. source
• Provision for income taxes for 2025 was $20,719 million and the effective tax rate was 15.6%. source
• The Company’s effective tax rate for 2025 was lower than the statutory federal income tax rate primarily due to a lower effective tax rate on foreign earnings, changes in unrecognized tax benefits, the impact of the U.S. federal R&D credit, and tax benefits from share-based compensation, partially offset by a change in valuation allowance and state income taxes. source

Impact estimates