Huntsman Corporation Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Note 20 - Income Taxes (Tables)

Note 20 - Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

	*Year ended December 31,*
	*2020*			*2019*			*2018*
Income tax expense (benefit):
U.S.
Current	$	(216	)	$	(17	)	$	57
Deferred		167			(181	)		(30	)
Non-U.S.
Current		90			71			153
Deferred		5			89			(135	)
Total	$	46		$	(38	)	$	45

	*Year ended December 31,*
	*2020*			*2019*			*2018*
Income tax expense (benefit):
U.S.
Current	$	(215	)	$	(21	)	$	57
Deferred		166			(179	)		(34	)
Non-U.S.
Current		90			70			153
Deferred		5			89			(135	)
Total	$	46		$	(41	)	$	41

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

	*Year ended December 31,*
	*2020*			*2019*			*2018*
Income from continuing operations before income taxes	$	337		$	391		$	734
Expected tax expense at U.S. statutory rate of 21%	$	71		$	82		$	154
Change resulting from:
State tax expense net of federal benefit		(4	)		(3	)		(1	)
Non-U.S. tax rate differentials		16			9			27
Other non-U.S. tax effects, including nondeductible expenses and other withholding taxes		5			13			8
U.S. Tax Reform Act impact		—			(1	)		32
Currency exchange gains/losses(net)		—			(5	)		(10	)
Venator investment basis difference and fair market value adjustments		—			(199	)		18
Tax losses related to Venator investment		—			(18	)		—
Non-U.S. income subject to U.S. tax not offset by U.S. foreign tax credits		7			7			16
Tax authority audits and dispute resolutions		1			(6	)		5
Share-based compensation excess tax benefits		(1	)		(4	)		(14	)
Change in valuation allowance		(14	)		56			(185	)
Deferred tax effects of non-U.S. tax rate changes		(2	)		36			(2	)
Impact of equity method investments		(10	)		(13	)		(14	)
Sale of the India-based DIY business		(35	)		—
Non-U.S. withholding tax on repatriated earnings, net of U.S. foreign tax credits		20			6			11
Other U.S. tax effects, including nondeductible expenses and other credits		(8	)		2			—
Total income tax expense (benefit)	$	46		$	(38	)	$	45

	*Year ended December 31,*
	*2020*			*2019*			*2018*
Income from continuing operations before income taxes	$	338		$	377		$	716
Expected tax expense at U.S. statutory rate of 21%	$	71		$	79		$	150
Change resulting from:
State tax expense net of federal benefit		(4	)		(3	)		(1	)
Non-U.S. tax rate differentials		16			9			27
Other non-U.S. tax effects, including nondeductible expenses and other withholding taxes		5			13			8
U.S. Tax Reform Act impact		—			(1	)		32
Currency exchange gains/losses(net)		—			(5	)		(10	)
Venator investment basis difference and fair market value adjustments		—			(199	)		18
Tax losses related to Venator investment		—			(18	)		—
Non-U.S. income subject to U.S. tax not offset by U.S. foreign tax credits		7			7			16
Tax authority audits and dispute resolutions		1			(6	)		5
Share-based compensation excess tax benefits		(1	)		(4	)		(14	)
Change in valuation allowance		(14	)		56			(185	)
Deferred tax effects of non-U.S. tax rate changes		(2	)		36			(2	)
Impact of equity method investments		(10	)		(13	)		(14	)
Sale of the India-based DIY business		(35	)		—			—
Non-U.S. withholding tax on repatriated earnings, net of U.S. foreign tax credits		20			6			11
Other U.S. tax effects, including nondeductible expenses and other credits		(8	)		2			—
Total income tax expense (benefit)	$	46		$	(41	)	$	41

Schedule of Income before Income Tax, Domestic and Foreign [Table Text Block]

	*Year ended December 31,*
	*2020*			*2019*			*2018*
U.S.	$	(231	)	$	(106	)	$	(38	)
Non-U.S.		568			497			772
Total	$	337		$	391		$	734

	*Year ended December 31,*
	*2020*			*2019*			*2018*
U.S.	$	(230	)	$	(120	)	$	(56	)
Non-U.S.		568			497			772
Total	$	338		$	377		$	716

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

	*December 31,*
	*2020*			*2019*
Deferred income tax assets:
Net operating loss carryforwards	$	258		$	281
Pension and other employee compensation		184			172
Property, plant and equipment		15			15
Intangible assets		52			56
Basis difference in Venator investment		35			199
Operating leases		111			98
Capital loss carryovers		30			11
Deferred interest		28			19
Other, net		44			42
Total	$	757		$	893
Deferred income tax liabilities:
Property, plant and equipment	$	(249	)	$	(218	)
Pension and other employee compensation		(4	)		(1	)
Intangible assets		(72	)		(27	)
Unrealized currency gains		(14	)		(43	)
Operating leases		(114	)		(102	)
Other, net		(22	)		(8	)
Total	$	(475	)	$	(399	)
Net deferred tax asset before valuation allowance	$	282		$	494
Valuation allowance—net operating losses and other		(206	)		(231	)
Net deferred tax asset	$	76		$	263
Non-current deferred tax asset		288			292
Non-current deferred tax liability		(212	)		(29	)
Net deferred tax asset	$	76		$	263

	*December 31,*
	*2020*			*2019*
Deferred income tax assets:
Net operating loss carryforwards	$	258		$	281
Pension and other employee compensation		184			172
Property, plant and equipment		15			15
Intangible assets		52			56
Basis difference in Venator investment		35			199
Operating leases		111			98
Capital loss carryovers		30			11
Deferred interest		28			19
Other, net		44			42
Total	$	757		$	893
Deferred income tax liabilities:
Property, plant and equipment	$	(249	)	$	(218	)
Pension and other employee compensation		(4	)		(1	)
Intangible assets		(72	)		(27	)
Unrealized currency gains		(14	)		(43	)
Operating leases		(114	)		(102	)
Other, net		(24	)		(8	)
Total	$	(477	)	$	(399	)
Net deferred tax asset before valuation allowance	$	280		$	494
Valuation allowance—net operating losses and other		(206	)		(231	)
Net deferred tax asset	$	74		$	263
Non-current deferred tax asset		288			292
Non-current deferred tax liability		(214	)		(29	)
Net deferred tax asset	$	74		$	263

Summary of Valuation Allowance [Table Text Block]

	*2020*			*2019*			*2018*
Valuation allowance as of January 1	$	231		$	215		$	412
Valuation allowance as of December 31		206			231			215
Net decrease (increase)		25			(16	)		197
Foreign currency movements		6			—			3
Decrease to deferred tax assets with no impact on operating tax expense, including an offsetting (decrease) increase to valuation allowances		(17	)		(40	)		(15	)
Change in valuation allowance per rate reconciliation	$	14		$	(56	)	$	185
Components of change in valuation allowance affecting tax expense:
Pre-tax income and losses in jurisdictions with valuation allowances resulting in no tax expense or benefit	$	14		$	(133	)	$	53
Releases of valuation allowances in various jurisdictions		—			—			132
Establishments of valuation allowances in various jurisdictions		—			77			—
Change in valuation allowance per rate reconciliation	$	14		$	(56	)	$	185

	*2020*			*2019*			*2018*
Valuation allowance as of January 1	$	231		$	215		$	412
Valuation allowance as of December 31		206			231			215
Net decrease (increase)		25			(16	)		197
Foreign currency movements		6			—			3
Decrease to deferred tax assets with no impact on operating tax expense, including an offsetting (decrease) increase to valuation allowances		(17	)		(40	)		(15	)
Change in valuation allowance per rate reconciliation	$	14		$	(56	)	$	185
Components of change in valuation allowance affecting tax expense:
Pre-tax income and losses in jurisdictions with valuation allowances resulting in no tax expense or benefit	$	14		$	(133	)	$	53
Releases of valuation allowances in various jurisdictions		—			—			132
Establishments of valuation allowances in various jurisdictions		—			77			—
Change in valuation allowance per rate reconciliation	$	14		$	(56	)	$	185

Schedule of Unrecognized Tax Benefits Roll Forward [Table Text Block]

	*2020*			*2019*
Unrecognized tax benefits as of January 1	$	28		$	26
Gross increases and decreases—tax positions taken during a prior period		2			4
Gross increases and decreases—tax positions taken during the current period		1			1
Decreases related to settlements of amounts due to tax authorities		(12	)		—
Reductions resulting from the lapse of statutes of limitation		(2	)		(4	)
Foreign currency movements		(1	)		1
Unrecognized tax benefits as of December 31	$	16		$	28

Schedule of Unrecognized Tax Benefits, Income Tax Penalties and Interest Recognized in Financial Statement [Table Text Block]

	*Year ended December 31,*
	*2020*		*2019*		*2018*
Interest expense included in tax expense	$	1	$	2	$	—
Penalties expense included in tax expense		—		2		—

	*December 31,*
	*2020*		*2019*
Accrued liability for interest	$	4	$	5
Accrued liability for penalties		—		2

Summary of Open Tax Years [Table Text Block]

Tax Jurisdiction		*Open Tax Years*
Belgium		2018 and later
China		2010 and later
France		2018 and later
Germany		2016 and later
Hong Kong		2014 and later
India		2004 and later
Italy		2015 and later
Japan		2017 and later
Mexico		2014 and later
Spain		2013 and later
Switzerland		2014 and later
The Netherlands		2016 and later
Thailand		2013 and later
United Kingdom		2017 and later
United States federal		2017 and later