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INCOME TAXES | 9 Months Ended
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Sep. 30, 2024
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES Income tax expense consists of U.S. and international income taxes, determined using an estimate of the Company's annual effective tax rate, which is based upon the applicable tax rates and tax laws of the countries in which the income is generated. A deferred tax liability is recognized for all taxable temporary differences, and a deferred tax asset is recognized for all deductible temporary differences and operating loss and tax credit carryforwards. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. The Company considers many factors when assessing the likelihood of future realization of the deferred tax assets, including its recent cumulative earnings experience by taxing jurisdiction, expectations of future income, tax planning strategies, the carryforward periods available for tax reporting purposes, and other relevant factors. The Company's effective tax rates for the three and nine months ended September 30, 2024 were 12.3% and 16.0%, respectively, compared to 20.3% and 19.8% for the three and nine months ended September 30, 2023, respectively. The Company's 2024 effective tax rates differ from the U.S. federal statutory tax rate of 21%, primarily due to the benefit of the Netherlands Innovation Box Tax (discussed below) and a reduction to the Company's 2018 federal one-time deemed repatriation liability, pursuant to the U.S. Tax Cuts and Jobs Act ("Tax Act"), resulting from a recent U.S. Tax Court decision in Varian Medical Systems, Inc. v. Commissioner, partially offset by higher international tax rates, unrecognized tax benefits and U.S. federal and state tax associated with the Company's international earnings. The Company's 2023 effective tax rates differed from the U.S. federal statutory tax rate of 21%, primarily due to the benefit of the Netherlands Innovation Box Tax, partially offset by higher international tax rates and certain non-deductible expenses. The Company's effective tax rates for the three and nine months ended September 30, 2024 were lower than the effective tax rates for the three and nine months ended September 30, 2023, primarily due to a reduction to the Company's 2018 federal one-time deemed repatriation liability, pursuant to the Tax Act, resulting from a recent U.S. Tax Court decision in Varian Medical Systems, Inc. v. Commissioner, partially offset by higher unrecognized tax benefits and higher U.S. federal and state tax associated with the Company's international earnings. The Company recorded a net tax expense reduction of $250 million during the three and nine months ended September 30, 2024 related to its 2018 federal one-time deemed repatriation liability. During the three and nine months ended September 30, 2024 and 2023, a majority of the Company's income was reported in the Netherlands, where Booking.com is based. According to Dutch corporate income tax law, income generated from qualifying innovative activities is taxed at a rate of 9% ("Innovation Box Tax") rather than the Dutch statutory rate of 25.8%. A portion of Booking.com's earnings during the three and nine months ended September 30, 2024 and 2023 qualified for Innovation Box Tax treatment, which had a beneficial impact on the Company's effective tax rates for these periods. The aggregate amount of unrecognized tax benefits for all matters at September 30, 2024 and December 31, 2023 was $262 million and $67 million, respectively. As of September 30, 2024, net unrecognized tax benefits of $237 million, if recognized, would impact the effective tax rate. As of September 30, 2024 and December 31, 2023, total gross interest and penalties accrued was $7 million. The increase in unrecognized tax benefits primarily relates to certain 2018 U.S. federal taxes that are impacted by the recent U.S. Tax Court decision in Varian Medical Systems, Inc. v. Commissioner. The majority of unrecognized tax benefits are included in "Other assets, net" in the Unaudited Consolidated Balance Sheet as of September 30, 2024. It is reasonably possible that the balance of gross unrecognized tax benefits could change over the next 12 months.

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