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Income Taxes (Tables) | 12 Months Ended
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Dec. 29, 2019
Income Tax Disclosure [Abstract] |
Provision for Income Taxes | The provision for taxes on income consists of:
(Dollars in Millions) |  | 2019 |  | 2018 |  | 2017
Currently payable: |  |  |  |  |  |
U.S. taxes |  | $ | 1,941 |  |  | 1,284 |  |  | 12,095 |
International taxes |  | 2,744 |  |  | 2,434 |  |  | 1,872 |
Total currently payable |  | 4,685 |  |  | 3,718 |  |  | 13,967 |
Deferred: |  |  |  |  |  |
U.S. taxes |  | (814 | ) |  | 1,210 |  | (1) | (1,956 | )
International taxes |  | (1,662 | ) |  | (2,226 | ) |  | 4,362 |
Total deferred |  | (2,476 | ) |  | (1,016 | ) |  | 2,406 |
Provision for taxes on income |  | $ | 2,209 |  |  | 2,702 |  |  | 16,373 |
Comparison of Income Taxes at Statutory Rate and Company's Effective Tax Rate | A comparison of income tax expense at the U.S. statutory rate of 21% in 2019 and 2018 and 35% in 2017, to the Company’s effective tax rate is as follows:
(Dollars in Millions) |  | 2019 |  | 2018 |  | 2017 |
U.S. |  | $ | 3,543 |  |  | 5,575 |  |  | 4,865 |  |
International |  | 13,785 |  |  | 12,424 |  |  | 12,808 |  |
Earnings before taxes on income: |  | $ | 17,328 |  |  | 17,999 |  |  | 17,673 |  |
Tax rates: |  |  |  |  |  |  |
U.S. statutory rate |  | 21.0 | % |  | 21.0 |  |  | 35.0 |  |
International operations (1) |  | (5.9 | ) |  | (3.7 | ) |  | (12.8 | ) |
U.S. taxes on international income (2) |  | 1.8 |  |  | 1.4 |  |  | 0.7 |  |
Tax benefits on share-based compensation |  | (0.5 | ) |  | (1.5 | ) |  | (2.1 | ) |
All other |  | 0.2 |  |  | (0.3 | ) |  | (1.5 | ) |
TCJA and related impacts |  | (3.9 | ) | (3) | (1.9 | ) | (3) | 73.3 |  | (4)
Effective Rate |  | 12.7 | % |  | 15.0 |  |  | 92.6 |  |
(1) For all periods presented the Company has subsidiaries operating in Puerto Rico under various tax incentives. International operations reflects the impacts of operations in jurisdictions with statutory tax rates different than the U.S., particularly Ireland, Switzerland and Puerto Rico, which is a favorable impact on the effective tax rate as compared with the U.S. statutory rate. The 2017 amount also includes tax cost related to the revaluation of deferred tax balances related to the change in the Belgian statutory tax rate increasing the tax provision by approximately 3.4%. (2) Includes the impact of the GILTI tax, the Foreign-Derived Intangible Income deduction and other foreign income that is taxable under the U.S. tax code. (3) Represents impact of adjustments to balances originally recorded as part of the 2017 TCJA provisional tax charge. Further information provided below. (4) Includes U.S. state and local taxes provisionally recorded as part TCJA provisional charge which was approximately 0.6% of the total effective tax rate.
Temporary Differences and Carryforwards | mporary differences and carryforwards for 2019 and 2018 were as follows:
|  | 2019 Deferred Tax |  | 2018 Deferred Tax
(Dollars in Millions) |  | Asset |  | Liability |  | Asset |  | Liability
Employee related obligations |  | $ | 2,393 |  |  |  |  |  | 2,398 |  |  |  |
Stock based compensation |  | 546 |  |  |  |  |  | 639 |  |  |  |
Depreciation & amortization |  | 1,122 |  |  |  |  |  | 1,784 |  |  |  |
Non-deductible intangibles |  |  |  |  | (5,752 | ) |  |  |  |  | (5,967 | )
International R&D capitalized for tax |  | 1,189 |  |  |  |  |  | 1,282 |  |  |  |
Reserves & liabilities |  | 2,384 |  |  |  |  |  | 1,647 |  |  |  |
Income reported for tax purposes |  | 1,605 |  |  |  |  |  | 1,104 |  |  |  |
Net operating loss carryforward international |  | 838 |  |  |  |  |  | 786 |  |  |  |
Undistributed foreign earnings |  | 765 |  |  | (1,289 | ) |  | 693 |  |  | (2,240 | )
Global intangible low-taxed income |  |  |  | (2,965 | ) |  |  |  | (2,971 | )
Miscellaneous international |  | 696 |  |  | (81 | ) |  | 603 |  |  | (93 | )
Miscellaneous U.S. |  | 410 |  |  |  |  |  | 469 |  |  |  |
Total deferred income taxes |  | $ | 11,948 |  |  | (10,087 | ) |  | 11,405 |  |  | (11,271 | )
T
Summary of Activity Related to Unrecognized Tax Benefits | The following table summarizes the activity related to unrecognized tax benefits:
(Dollars in Millions) |  | 2019 |  | 2018 |  | 2017 |
Beginning of year |  | $ | 3,326 |  |  | 3,151 |  |  | 3,041 |  |
Increases related to current year tax positions |  | 249 |  |  | 242 |  |  | 332 |  |
Increases related to prior period tax positions |  | 408 |  |  | 145 |  |  | 232 |  |
Decreases related to prior period tax positions |  | (105 | ) |  | (137 | ) |  | (416 | ) | (1)
Settlements |  | (9 | ) |  | (40 | ) |  | (2 | ) |
Lapse of statute of limitations |  | (16 | ) |  | (35 | ) |  | (36 | ) |
End of year |  | $ | 3,853 |  |  | 3,326 |  |  | 3,151 |  |
(1) In 2017, $347 million of this decrease is related to the TCJA.

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- Definition Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32639-109319 + Details
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