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

Annual report pursuant to Section 13 and 15(d)

Note 19 - Income Taxes (Tables)

Note 19 - Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

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

	*Year ended December 31,*
	*2021*			*2020*			*2019*
Income tax expense (benefit):
U.S.
Current	$	119		$	(216	)	$	(17	)
Deferred		(70	)		167			(181	)
Non-U.S.
Current		127			90			71
Deferred		33			5			89
Total	$	209		$	46		$	(38	)

	*Year ended December 31,*
	*2021*			*2020*			*2019*
Income tax expense (benefit):
U.S.
Current	$	121		$	(215	)	$	(21	)
Deferred		(71	)		166			(179	)
Non-U.S.
Current		127			90			70
Deferred		33			5			89
Total	$	210		$	46		$	(41	)

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

	*Year ended December 31,*
	*2021*			*2020*			*2019*
Income from continuing operations before income taxes	$	1,313		$	337		$	391
Expected tax expense at U.S. statutory rate of 21%	$	276		$	71		$	82
Change resulting from:
State tax expense, net of federal benefit		15			(4	)		(3	)
Non-U.S. tax rate differentials		18			16			9
Other non-U.S. tax effects, including nondeductible expenses and other withholding taxes		16			5			13
U.S. Tax Reform Act impact		—			—			(1	)
Currency exchange gains/losses, net		(2	)		—			(5	)
Venator investment basis difference and fair market value adjustments		(29	)		—			(199	)
Change in valuation allowance on capital loss related to Venator investment		(28	)		—			(18	)
Non-U.S. income subject to U.S. tax not offset by U.S. foreign tax credits		(19	)		7			7
Tax authority audits and dispute resolutions		6			1			(6	)
Share-based compensation excess tax benefits		—			(1	)		(4	)
Change in valuation allowance		(9	)		(14	)		56
Deferred tax effects of non-U.S. tax rate changes		(3	)		(2	)		36
Impact of equity method investments		(37	)		(10	)		(13	)
Sale of the India-based DIY business		(4	)		(35	)		—
Non-U.S. withholding tax on repatriated earnings, net of U.S. foreign tax credits		14			20			6
Other U.S. tax effects, including nondeductible expenses and other credits		(5	)		(8	)		2
Total income tax expense (benefit)	$	209		$	46		$	(38	)

	*Year ended December 31,*
	*2021*			*2020*			*2019*
Income from continuing operations before income taxes	$	1,317		$	338		$	377
Expected tax expense at U.S. statutory rate of 21%	$	277		$	71		$	79
Change resulting from:
State tax expense, net of federal benefit		15			(4	)		(3	)
Non-U.S. tax rate differentials		18			16			9
Other non-U.S. tax effects, including nondeductible expenses and other withholding taxes		16			5			13
U.S. Tax Reform Act impact		—			—			(1	)
Currency exchange gains/losses, net		(2	)		—			(5	)
Venator investment basis difference and fair market value adjustments		(29	)		—			(199	)
Change in valuation allowance on capital loss related to Venator investment		(28	)		—			(18	)
Non-U.S. income subject to U.S. tax not offset by U.S. foreign tax credits		(19	)		7			7
Tax authority audits and dispute resolutions		6			1			(6	)
Share-based compensation excess tax benefits		—			(1	)		(4	)
Change in valuation allowance		(9	)		(14	)		56
Deferred tax effects of non-U.S. tax rate changes		(3	)		(2	)		36
Impact of equity method investments		(37	)		(10	)		(13	)
Sale of the India-based DIY business		(4	)		(35	)		—
Non-U.S. withholding tax on repatriated earnings, net of U.S. foreign tax credits		14			20			6
Other U.S. tax effects, including nondeductible expenses and other credits		(5	)		(8	)		2
Total income tax expense (benefit)	$	210		$	46		$	(41	)

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

	*Year ended December 31,*
	*2021*		*2020*			*2019*
U.S.	$	534	$	(231	)	$	(106	)
Non-U.S.		779		568			497
Total	$	1,313	$	337		$	391

	*Year ended December 31,*
	*2021*		*2020*			*2019*
U.S.	$	538	$	(230	)	$	(120	)
Non-U.S.		779		568			497
Total	$	1,317	$	338		$	377

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

	*December 31,*
	*2021*			*2020*
Deferred income tax assets:
Net operating loss carryforwards	$	221		$	258
Pension and other employee compensation		129			184
Property, plant and equipment		22			15
Intangible assets		28			52
Basis difference in Venator investment		42			35
Operating leases		106			111
Capital loss carryovers		2			30
Deferred interest		35			28
Intercompany prepayments (FDII related)		56			—
Other, net		35			44
Total	$	676		$	757
Deferred income tax liabilities:
Property, plant and equipment	$	(234	)	$	(249	)
Pension and other employee compensation		(36	)		(4	)
Intangible assets		(93	)		(72	)
Unrealized currency gains		(6	)		(14	)
Operating leases		(105	)		(114	)
Other, net		(26	)		(22	)
Total	$	(500	)	$	(475	)
Net deferred tax asset before valuation allowance	$	176		$	282
Valuation allowance—net operating losses and other		(131	)		(206	)
Net deferred tax asset	$	45		$	76
Non-current deferred tax asset	$	206		$	288
Non-current deferred tax liability		(161	)		(212	)
Net deferred tax asset	$	45		$	76

	*December 31,*
	*2021*			*2020*
Deferred income tax assets:
Net operating loss carryforwards	$	221		$	258
Pension and other employee compensation		129			184
Property, plant and equipment		22			15
Intangible assets		28			52
Basis difference in Venator investment		42			35
Operating leases		106			111
Capital loss carryovers		2			30
Deferred interest		35			28
Intercompany prepayments (FDII related)		56			—
Other, net		35			44
Total	$	676		$	757
Deferred income tax liabilities:
Property, plant and equipment	$	(234	)	$	(249	)
Pension and other employee compensation		(36	)		(4	)
Intangible assets		(93	)		(72	)
Unrealized currency gains		(6	)		(14	)
Operating leases		(105	)		(114	)
Other, net		(28	)		(24	)
Total	$	(502	)	$	(477	)
Net deferred tax asset before valuation allowance	$	174		$	280
Valuation allowance—net operating losses and other		(131	)		(206	)
Net deferred tax asset	$	43		$	74
Non-current deferred tax asset	$	206		$	288
Non-current deferred tax liability		(163	)		(214	)
Net deferred tax asset	$	43		$	74

Summary of Valuation Allowance [Table Text Block]

	*2021*			*2020*			*2019*
Valuation allowance as of January 1	$	206		$	231		$	215
Valuation allowance as of December 31		131			206			231
Net decrease (increase)		75			25			(16	)
Foreign currency movements		(4	)		6			—
Decrease to deferred tax assets with no impact on operating tax expense, including an offsetting (decrease) increase to valuation allowances		(62	)		(17	)		(40	)
Change in valuation allowance per rate reconciliation	$	9		$	14		$	(56	)
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	$	13		$	14		$	(133	)
Releases of valuation allowances in various jurisdictions		2			—			—
Establishments of valuation allowances in various jurisdictions		(6	)		—			77
Change in valuation allowance per rate reconciliation	$	9		$	14		$	(56	)

	*2021*			*2020*			*2019*
Valuation allowance as of January 1	$	206		$	231		$	215
Valuation allowance as of December 31		131			206			231
Net decrease (increase)		75			25			(16	)
Foreign currency movements		(4	)		6			—
Decrease to deferred tax assets with no impact on operating tax expense, including an offsetting (decrease) increase to valuation allowances		(62	)		(17	)		(40	)
Change in valuation allowance per rate reconciliation	$	9		$	14		$	(56	)
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	$	13		$	14		$	(133	)
Releases of valuation allowances in various jurisdictions		2			—			—
Establishments of valuation allowances in various jurisdictions		(6	)		—			77
Change in valuation allowance per rate reconciliation	$	9		$	14		$	(56	)

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

	*2021*			*2020*
Unrecognized tax benefits as of January 1	$	16		$	28
Gross increases and decreases—tax positions taken during a prior period		30			2
Gross increases and decreases—tax positions taken during the current period		2			1
Decreases related to settlements of amounts due to tax authorities		—			(12	)
Reductions resulting from the lapse of statutes of limitation		(1	)		(2	)
Foreign currency movements		1			(1	)
Unrecognized tax benefits as of December 31	$	48		$	16

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

	*Year ended December 31,*
	*2021*		*2020*		*2019*
Interest expense included in tax expense	$	2	$	1	$	2
Penalties expense included in tax expense		—		—		2

	*December 31,*
	*2021*		*2020*
Accrued liability for interest	$	6	$	4
Accrued liability for penalties		—		—

Summary of Open Tax Years [Table Text Block]

Tax Jurisdiction		*Open Tax Years*
Belgium		2019 and later
China		2011 and later
France		2019 and later
Germany		2016 and later
Hong Kong		2015 and later
India		2004 and later
Italy		2016 and later
Japan		2017 and later
Mexico		2016 and later
Spain		2017 and later
Switzerland		2016 and later
The Netherlands		2019 and later
Thailand		2019 and later
United Kingdom		2019 and later
United States federal		2017 and later