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Income Taxes
9 Months Ended
Sep. 30, 2015
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes
Taxes on income for the third quarter and first nine months of 2015 were $0.7 billion and $1.8 billion, respectively, compared with $3.2 billion and $10.0 billion for the corresponding periods in 2014. The associated effective tax rates (calculated as the amount of Income Tax Expense divided by Income Before Income Tax Expense) for the third quarters of 2015 and 2014 were 26 percent and 37 percent, respectively. For the comparative nine-month periods, the effective tax rates were 25 percent and 39 percent, respectively.
The decrease in the effective tax rate between the quarterly periods primarily resulted from the effects of equity earnings, foreign currency remeasurement and one-time tax benefits, partially offset by the effects of valuation allowances recognized on deferred tax assets. The decrease in the effective tax rate for the nine-month comparative period was primarily due to the effects of equity earnings, foreign currency remeasurement, a reduction in statutory tax rates in the United Kingdom and jurisdictional mix, partially offset by the effects of valuation allowances recognized on deferred tax assets.
Tax positions for Chevron and its subsidiaries and affiliates are subject to income tax audits by many tax jurisdictions throughout the world. For the company’s major tax jurisdictions, examinations of tax returns for certain prior tax years had not been completed as of September 30, 2015. For these jurisdictions, the latest years for which income tax examinations had been finalized were as follows: United States — 2008, Nigeria — 2000, Angola — 2001, Saudi Arabia — 2012 and Kazakhstan — 2007.
The company engages in ongoing discussions with tax authorities regarding the resolution of tax matters in the various jurisdictions. Both the outcomes for these tax matters and the timing of resolution and/or closure of the tax audits are highly uncertain. However, it is reasonably possible that developments regarding tax matters in certain tax jurisdictions may result in significant increases or decreases in the company’s total unrecognized tax
benefits within the next 12 months. Given the number of years that still remain subject to examination and the number of matters being examined in the various tax jurisdictions, the company is unable to estimate the range of possible adjustments to the balance of unrecognized tax benefits.