EL · 10-K · 2026A · Full report

Tax Law and Transfer Pricing

ESTEE LAUDER COMPANIES INC · 2026-08-19 · Importance 46 · Surprise 42 · In source text

The Company reported that the One Big Beautiful Bill Act increased tax-deductible interest expense, reduced U.S. taxable income, and increased excess foreign tax credits requiring a valuation allowance, contributing approximately 1,010 basis points to its fiscal 2026 effective tax rate increase. Changes in unrecognized tax benefits related to transfer-pricing matters across multiple tax jurisdictions added approximately 820 basis points. The Company also attributed approximately 5,630 basis points of the increase to the effective tax rate on foreign operations, including new valuation allowances on certain foreign deferred tax assets.

Key facts

• The One Big Beautiful Bill Act had an unfavorable impact of approximately 1,010 basis points on the fiscal 2026 effective tax rate, related to increased tax-deductible interest expense, reduced U.S. taxable income, excess foreign tax credits, and a valuation allowance. source
• Changes in unrecognized tax benefits related to transfer pricing matters across multiple tax jurisdictions increased the fiscal 2026 effective tax rate by approximately 820 basis points. source
• Changes in tax laws and regulations could affect ESTEE LAUDER COMPANIES INC's business. source

Impact estimates