KHC · 10-Q · 2026Q2 · Full report

Income Tax Rate Changes

Kraft Heinz Co · 2026-08-05 · Importance 27 · Surprise 40

The second-quarter 2026 effective tax rate was a 14.4% benefit on pretax loss, compared with a 4.2% benefit in the prior-year quarter. The six-month effective tax rate was a 13.1% benefit, compared with a 0.6% benefit in the prior-year period. The year-over-year changes primarily reflected non-deductible goodwill impairment effects and a more favorable geographic mix of pretax income in non-U.S. jurisdictions. The 2026 six-month rate included a 10.8% unfavorable impact from goodwill and intangible impairment losses, versus 24.7% in the prior-year period.

Key facts

• Deferred income taxes at June 27, 2026: $7,848 million. source
• The amount of unrecognized deferred tax liabilities for local country withholding taxes related to 2018 through 2026 accumulated earnings is approximately $70 million. source
• The company's effective tax rate for the three months ended June 27, 2026 was a benefit of 14.4% on pre-tax loss, which included a net unfavorable effective tax rate impact of goodwill and intangible asset impairment losses of 9.0%. source
• Certain significant discrete income tax items were an expense of $3 million for the three months and $16 million for six months ended June 28, 2025 related to movement in the valuation allowance in Brazil and adjustments related to transfer of business operations to a wholly-owned subsidiary in the Netherlands in December 2024. source
• The company's effective tax rate for the three months ended June 27, 2026 was a benefit of 14.4% on pre-tax loss, which included the net unfavorable effective tax rate impact of goodwill and intangible asset impairment losses of 9.0%. source
• The company's effective tax rate for the three months ended June 28, 2025 was a benefit of 4.2% on pre-tax loss, which included the net unfavorable effective tax rate impact of goodwill and intangible asset impairment losses of 21.6%. source
• The company's effective tax rate for the six months ended June 27, 2026 was a benefit of 13.1% on pre-tax loss, which included the net unfavorable effective tax rate impact of goodwill and intangible asset impairment losses of 10.8%. source
• The company's effective tax rate for the six months ended June 28, 2025 was a benefit of 0.6% on pre-tax loss, which included the net unfavorable effective tax rate impact of goodwill and intangible asset impairment losses of 24.7%. source