JCI · 10-K · 2026A · Full report

Income Tax Rate Changes

Johnson Controls International plc · 2026-11-12 · Importance 38 · Surprise 24 · In source text

At September 30, 2026, Johnson Controls reported a $6.4 billion valuation allowance for continuing operations, including $6.2 billion related to net operating and capital loss carryforwards. Those carryforwards primarily relate to France, Ireland, Luxembourg, Mexico, and the United Kingdom, where the Company has not demonstrated sustainable taxable income. Federal and certain non-U.S. income tax returns for various fiscal years remain under audit, and the Company recorded a $1.8 billion liability for its best estimate of probable losses on certain tax positions. The amounts ultimately paid may differ materially from the amounts accrued.

Key facts

• At September 30, 2026, Johnson Controls International plc had a $6.4 billion valuation allowance for continuing operations, including $6.2 billion related to net operating and capital loss carryforwards and $0.2 billion for other deferred tax assets. source
• At September 30, 2026, Johnson Controls International plc had recorded a $1.8 billion liability for its best estimate of the probable loss on certain tax positions. source
• Johnson Controls' effective tax rate for continuing operations was 16% in fiscal 2026, higher than the statutory rate primarily because of the tax impact of AFFF insurance proceeds and current and planned divestitures, and tax-rate differentials. source
• Johnson Controls' effective tax rate for continuing operations was 12% in fiscal 2025, lower than the statutory rate primarily because of impairment and restructuring charges and global tax-planning benefits, partially offset by unfavorable tax-audit resolutions. source

Impact estimates