Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Schedule of Income From Continuing Operations Before Income Tax

Income before income tax and the provision for income tax consist of the following (in millions):

	Years Ended December 31
	2022		2021		2020
Income (loss) before income taxes:
Ireland	$	85	$	15	$	(86)
U.K.	502		549		634
U.S.	161		(818)		(28)
Other	2,408		2,185		1,946
Total	$	3,156	$	1,931	$	2,466
Income tax expense:
Current:
Ireland	$	2	$	2	$	2
U.K.	206		50		30
U.S. federal	195		197		126
U.S. state and local	43		72		22
Other	316		291		259
Total current tax expense	$	762	$	612	$	439
Deferred tax expense (benefit):
Ireland	$	—	$	(1)	$	(1)
U.K.	(152)		131		39
U.S. federal	(69)		(83)		(72)
U.S. state and local	(21)		(30)		(4)
Other	(10)		(6)		47
Total deferred tax expense (benefit)	$	(252)	$	11	$	9
Total income tax expense	$	510	$	623	$	448

Schedule of Reconciliation of the Income Tax Provisions based on the U.S. Statutory Corporate Tax Rate to the Provisions Reflected in the Consolidated Financial Statements

	Years Ended December 31
	2022	2021	2020
Statutory tax rate	25.0%	25.0%	25.0%
U.S. state income taxes, net of U.S. federal benefit	0.4	1.5	1.0
Taxes on international operations (1) (2)	(11.6)	(15.4)	(9.8)
Nondeductible expenses	2.4	3.3	2.1
Adjustments to prior year tax requirements	(7.0)	(0.2)	—
Deferred tax adjustments, including statutory rate changes	(0.5)	3.2	0.7
Deferred tax adjustments, international earnings	0.2	1.8	0.7
Adjustments to valuation allowances	1.9	(0.2)	—
Change in uncertain tax positions	8.6	2.1	1.5
Excess tax benefits related to shared based compensation (3)	(1.5)	(2.4)	(2.2)
Capital and other losses	(1.4)	—	(1.8)
Non-deductible transaction costs	—	1.1	1.3
Non-deductible termination fee	—	12.9	—
Other — net	(0.3)	(0.4)	(0.3)
Effective tax rate	16.2%	32.3%	18.2%

(1)The Company determines the adjustment for taxes on international operations based on the difference between the statutory tax rate applicable to earnings in each foreign jurisdiction and the enacted rate of 25.0%, 25.0% and 25.0% at December 31, 2022, 2021, and 2020, respectively. The benefit to the Company’s effective income tax rate from taxes on international operations relates to benefits from lower-taxed global operations, primarily due to the use of global funding structures and the tax holiday in Singapore.

(2)In July 2020, final U.S. tax regulations were issued regarding the GILTI high tax election, allowing taxpayers to exclude from GILTI the income of a Controlled Foreign Corporation that incurs a foreign tax rate more than 90% of the top U.S. corporate tax rate. A GILTI high tax election may be made on an annual basis, and taxpayers may choose to apply the election to taxable years beginning after December 31, 2017. The Company expects to make the GILTI high-tax election for 2022 and therefore recorded the impact of making the election.

(3)Excess tax benefits and deficiencies from share-based payment transactions are recognized as income tax expense or benefit in the Company’s Consolidated Statements of Income.

Schedule of Components of Aon's Deferred Tax Assets and Liabilities

The components of the Company’s deferred tax assets and liabilities are as follows (in millions):

As of December 31	2022		2021
Deferred tax assets:
Net operating loss, capital loss, interest, and tax credit carryforwards	$	952	$	581
Lease liabilities	178		207
Employee benefit plans	297		160
Other accrued expenses	100		132
Accrued interest	—		97
Federal and state benefit of interest from uncertain tax positions	57		45
Deferred revenue	26		36
Investment basis differences	30		25
Lease and service guarantees	1		1
Other	38		25
Total	1,679		1,309
Valuation allowance on deferred tax assets	(275)		(230)
Total	$	1,404	$	1,079
Deferred tax liabilities:
Intangibles and property, plant and equipment	$	(258)	$	(243)
Lease right-of-use asset	(151)		(173)
Deferred costs	(147)		(159)
Unremitted earnings	(38)		(58)
Other accrued expenses	(20)		(27)
Unrealized foreign exchange gains	(23)		(22)
Other	(42)		(32)
Total	$	(679)	$	(714)
Net deferred tax asset	$	725	$	365

Schedule of Deferred Income Taxes (Assets and Liabilities Netted by Jurisdiction) as Classified in the Consolidated Statements of Financial Position

Deferred income taxes (assets and liabilities have been netted by jurisdiction) have been classified in the Consolidated Statements of Financial Position as follows (in millions):

As of December 31	2022		2021
Deferred tax assets — non-current	$	824	$	766
Deferred tax liabilities — non-current	(99)		(401)
Net deferred tax asset	$	725	$	365

Schedule of Operating and Capital Loss Carryforwards

The Company had the following carryforwards (in millions):

As of December 31	2022		2021
U.K.
Operating loss carryforwards	$	608	$	41
Capital loss carryforwards	$	533	$	573
U.S.
Federal operating loss carryforwards	$	1	$	25
Federal capital loss carryforwards	$	112	$	112
Federal interest carryforwards	$	2,269	$	1,140
Federal foreign tax credit carryforwards	$	20	$	18
State operating loss carryforwards	$	473	$	398
State capital loss carryforwards	$	123	$	123
State interest carryforwards	$	1,187	$	551
Other Non-U.S.
Operating loss carryforwards	$	490	$	301
Capital loss carryforwards	$	8	$	35
Interest carryforwards	$	26	$	26
Other carryforwards	$	5	$	5

Schedule of Reconciliation of the Beginning and Ending Amount of Unrecognized Tax Benefits

The following is a reconciliation of the Company’s beginning and ending amount of uncertain tax positions (in millions):

	2022		2021
Balance at January 1	$	347	$	321
Additions based on tax positions related to the current year	35		33
Additions for tax positions of prior years	226		7
Reductions for tax positions of prior years	(1)		(4)
Settlements	(1)		—
Business combinations	—		—
Lapse of statute of limitations	(5)		(10)
Foreign currency translation	—		—
Balance at December 31	$	601	$	347