Income Taxes

9 Months Ended

Sep. 26, 2020

Income Tax Disclosure [Abstract]

Income Taxes [Text Block]

Note 5.    Income Taxes

The provision for income taxes in the accompanying statement of income differs from the provision calculated by applying the statutory federal income tax rate to income before provision for income taxes due to the following:

	Nine Months Ended
	September 26,			September 28,
(In millions)	2020			2019
Statutory Federal Income Tax Rate	21		%	21		%
Provision for Income Taxes at Statutory Rate	$	910		$	637
Increases (Decreases) Resulting From:
Foreign rate differential	(132)			(172)
Foreign exchange loss on inter-company debt refinancing	—			(62)
Income tax credits	(333)			(242)
Global intangible low-taxed income	210			160
Foreign-derived intangible income	(53)			(68)
Excess tax benefits from stock options and restricted stock units	(94)			(68)
Basis difference on disposal of business	—			72
Other, net	(52)			81
Provision for Income Taxes	$	456		$	338

The company has operations and a taxable presence in approximately 50 countries outside the U.S. The company's effective income tax rate differs from the U.S. federal statutory rate each year due to certain operations that are subject to tax incentives, state and local taxes, and foreign taxes that are different than the U.S. federal statutory rate.

In the second quarter of 2020, the company implemented foreign tax credit planning in Sweden which resulted in $96 million of foreign tax credits, with no related incremental U.S. income tax expense.

Unrecognized Tax Benefits

As of September 26, 2020, the company had $1.51 billion of unrecognized tax benefits substantially all of which, if recognized, would reduce the effective tax rate.

A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows:

(In millions)	2020
Balance at Beginning of Year	$	1,552
Additions for tax positions of current year	6
Reductions for tax positions of prior years	(38)
Settlements	(7)
Balance at End of Period	$	1,513