MRK · 10-Q · 2026Q3 · Full report

Income Tax Rate Changes

Merck & Co., Inc. · 2026-11-04 · Importance 52 · Surprise 42 · No source text

The effective tax rate was 8.9% in the third quarter of 2026, reflecting favorable discrete items and the jurisdictional mix of income and expense. For the first nine months of 2026, Merck recorded a $1.9 billion tax provision on $1.3 billion of pretax income, producing a 138.2% effective rate. The rate included a 126.6-percentage-point unfavorable impact from the Cidara and Terns acquisition charges, which generated no tax benefits, partly offset by favorable discrete items and jurisdictional mix. The comparable 2025 effective rates were 14.2% for the quarter and 13.3% year to date.

Key facts

• Merck recorded a $1.9 billion income tax provision on $1.3 billion of pretax income for the first nine months of 2026, resulting in a 138.2% effective tax rate. source
• Acquisition charges for Cidara and Terns, which had no tax benefits, caused a combined unfavorable 126.6 percentage-point impact on the first-nine-months 2026 effective tax rate. source
• The effective income tax rate was 8.9% in Q3 2026, reflecting favorable discrete-item impacts and jurisdictional mix. source

Impact estimates