MDT · 10-Q · 2026Q3 · Full report

Income Tax Rate Changes

Medtronic plc · 2026-09-03 · Importance 38 · Surprise 58

Medtronic’s effective tax rate declined to 16.4% for the three months ended July 31, 2026, from 19.6% in the prior-year period. The reduction primarily reflected the release of reserves for uncertain tax positions on prior-period intercompany transactions and changes in operating results by jurisdiction. The non-GAAP nominal tax rate decreased to 17.2% from 17.8%. A 1-percentage-point increase in the non-GAAP nominal tax rate would have increased the quarterly tax provision by approximately $23 million.

Key facts

• The Company's effective tax rate decreased to 16.4% for the three months ended July 31, 2026 from 19.6% for the three months ended July 25, 2025, primarily due to the release of reserves for uncertain tax positions and year-over-year changes in operational results by jurisdiction. source
• GAAP income before income taxes for the three months ended July 31, 2026 was $1,769 million, GAAP net income attributable to Medtronic was $1,470 million, GAAP diluted EPS was $1.14, and the GAAP effective tax rate was 16.4%. source
• Non-GAAP income before income taxes for the three months ended July 31, 2026 was $2,257 million, non-GAAP net income attributable was $1,860 million, non-GAAP diluted EPS was $1.45, and the non-GAAP nominal tax rate was 17.2%. source
• The One Big Beautiful Bill Act of 2025 was enacted on July 4, 2025 and Medtronic stated its impact for the three months ended July 31, 2026 and July 25, 2025 was not material. source
• An increase in the non-GAAP nominal tax rate of 1 percent would result in an additional income tax provision for the three months ended July 31, 2026 of approximately $23 million. source
• GAAP income before income taxes for the three months ended July 25, 2025 was $1,302 million, GAAP net income attributable was $1,040 million, GAAP diluted EPS was $0.81, and the GAAP effective tax rate was 19.6%. source
• Non-GAAP income before income taxes for the three months ended July 25, 2025 was $1,987 million, non-GAAP net income attributable was $1,626 million, non-GAAP diluted EPS was $1.26, and the non-GAAP nominal tax rate was 17.8%. source