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Income Taxes
6 Months Ended
Jun. 30, 2019
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The increase in income tax expense between quarterly periods of $162 million, from $1.48 billion in 2018 to $1.65 billion in 2019, is a result of the year-over-year increase in total income before income tax expense, which is primarily due to the receipt of the Anadarko merger termination fee and higher production volumes offset by lower crude oil and natural gas prices. The company’s effective tax rate changed between quarterly periods from 30 percent in 2018 to 28 percent in 2019. The change in effective tax rate is primarily due to the tax benefit related to a reduction in the Alberta, Canada corporate tax rate partially offset by the consequence of the mix effect resulting from the absolute level of earnings or losses and whether they arose in higher or lower tax rate jurisdictions.
The increase in income tax expense between six-month periods of $63 million, from $2.90 billion in 2018 to $2.96 billion in 2019, is a result of the year-over-year effective tax rate increase as total before-tax income was similar between periods at $9.98 billion in 2018 and $9.89 billion in 2019. The company’s effective tax rate changed between six-month periods from 29 percent in 2018 to 30 percent in 2019. The change in effective tax rate is primarily a consequence of the mix effect resulting from the absolute level of earnings or losses and whether they arose in higher or lower tax rate jurisdictions, partially offset by the tax benefit related to a reduction in the Alberta, Canada corporate tax rate.
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 June 30, 2019. For these jurisdictions, the latest years for which income tax examinations had been finalized were as follows: United States — 2013, Nigeria — 2000, Australia — 2006 and Kazakhstan — 2012.
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.