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Income Taxes
 12 Months Ended
Oct. 29, 2023
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The components of income before income taxes by U.S. and foreign jurisdictions were as follows:
 Fiscal Year
202320222021
(In millions)
Domestic loss$(63)$(2,020)$(3,103)
Foreign income15,160 14,454 9,868 
Income before income taxes
$15,097 $12,434 $6,765 
The components of the provision for income taxes were as follows:
 Fiscal Year
202320222021
(In millions)
Current tax provision:
   
Federal$952 $174 $446 
State23 48 46 
Foreign541 762 534 
 Total1,516 984 1,026 
Deferred tax provision (benefit):
   
Federal(499)68 (876)
State(31)(15)(114)
Foreign29 (98)(7)
Total(501)(45)(997)
Total provision for income taxes
$1,015 $939 $29 
The following is a reconciliation of our effective tax rate to the statutory federal tax rate:
 Fiscal Year
202320222021
Statutory tax rate21.0 %21.0 %21.0 %
State, net of federal benefit— 0.2 (0.8)
Foreign income taxed at different rates(17.3)(19.1)(22.8)
Deemed inclusion of foreign earnings9.9 8.0 9.5 
Foreign-derived intangible income deduction— — (3.1)
Uncertain tax benefits
(1.9)1.6 3.7 
Excess tax benefits from stock-based compensation(3.4)(3.0)(4.6)
Research and development credit(1.8)(1.4)(2.3)
Other, net0.2 0.2 (0.2)
Effective tax rate on income before income taxes6.7 %7.5 %0.4 %
The increase in provision for income taxes in fiscal year 2023 compared to fiscal year 2022 was primarily due to higher income before income taxes, partially offset by an increase in the recognition of uncertain tax benefits as a result of lapses of statutes of limitations. The increase in provision for income taxes in fiscal year 2022 compared to fiscal year 2021 was primarily due to higher income before income taxes.
We derive the effective tax rate benefit attributed to foreign income taxed at different rates primarily from our operations in Singapore and Malaysia. Our tax incentives from the Singapore Economic Development Board provide that any qualifying income earned in Singapore is subject to tax incentives or reduced rates of Singapore income tax, subject to our compliance with the conditions specified in these incentives and legislative developments. These Singapore tax incentives are expected to expire in November 2025. We have also obtained a tax holiday from our qualifying income earned in Malaysia, which is scheduled to expire in fiscal year 2028. The tax holiday that we negotiated in Malaysia is also subject to our compliance with various operating and other conditions. Before taking into consideration the effects of the U.S. Tax Cuts and Jobs Act and other indirect tax impacts, the effect of these tax incentives and tax holiday decreased the provision for income taxes by approximately $2,104 million, $1,821 million and $1,156 million for fiscal years 2023, 2022 and 2021, respectively.
Significant components of our deferred tax assets and liabilities consisted of the following:
October 29,
2023		October 30,
2022
(In millions)
Deferred income tax assets:  
Net operating loss, credit and other carryforwards$1,809 $1,808 
Capitalized research and development
275 — 
Deferred revenue208 645 
Employee stock awards190 183 
Depreciation and amortization
223 156 
Other deferred income tax assets329 343 
Gross deferred income tax assets3,034 3,135 
Less: valuation allowance(1,789)(1,777)
Deferred income tax assets1,245 1,358 
Deferred income tax liabilities:
Depreciation and amortization97 341 
Unamortized debt discount and issuance costs
302 322 
Foreign earnings not indefinitely reinvested86 86 
Other deferred income tax liabilities62 36 
Deferred income tax liabilities547 785 
Net deferred income tax assets$698 $573 
The 2017 Tax Act amended Internal Revenue Code Section 174 to require businesses to capitalize and amortize research and development expenses and became effective in our fiscal year 2023. In fiscal year 2023, we recorded a deferred tax asset of $275 million for capitalized research and development.
We continue to indefinitely reinvest $1,963 million of certain accumulated foreign earnings. The unrecognized deferred income tax liability related to these earnings is estimated to be $206 million. All other current and future earnings of all our foreign subsidiaries are not considered permanently reinvested.
As of October 29, 2023, we had tax effected U.S. state net operating loss (“NOL”) carryforwards of $136 million and foreign NOL carryforwards of $128 million. The state and foreign NOL carryforwards expire in various years beginning in fiscal years 2024 and 2025, respectively. We had $1,462 million of state research and development tax credits which begin to expire in fiscal year 2024. We have provided a valuation allowance on substantially all state tax credits and state and foreign net operating loss carryforwards as we do not expect them to be realized.
Uncertain Tax Positions
The following table reconciles the beginning and ending balance of gross unrecognized tax benefits:
Fiscal Year
202320222021
(In millions)
Beginning balance$5,117 $5,030 $4,748 
Lapses of statutes of limitations(634)(50)(58)
Increases in balances related to tax positions taken during prior periods
26 — 41 
Decreases in balances related to tax positions taken during prior periods(13)(113)— 
Increases in balances related to tax positions taken during current period
170 288 337 
Decreases in balances related to settlements with taxing authorities(11)(38)(38)
Ending balance$4,655 $5,117 $5,030 
We recognize interest and penalties related to unrecognized tax benefits within the provision for income taxes. Accrued interest and penalties were included within other long-term liabilities. During fiscal years 2023, 2022 and 2021, we recognized interest and penalties of $22 million, $25 million and $46 million respectively, within the provision for income taxes. As of October 29, 2023 and October 30, 2022, the combined amount of cumulative accrued interest and penalties was approximately $389 million and $411 million, respectively.
As of October 29, 2023 and October 30, 2022, approximately $5,044 million and $5,528 million, respectively, of the unrecognized tax benefits and accrued interest and penalties would, if recognized, benefit our effective income tax rate. We are subject to U.S. income tax examination for fiscal years 2018 and later. Certain of our acquired companies are subject to tax examinations in major jurisdictions outside of the U.S. for fiscal years 2008 and later. It is possible that our existing unrecognized tax benefits may change up to $499 million as a result of lapses of the statute of limitations for certain audit periods and/or audit examinations expected to be completed within the next 12 months.