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Income Taxes | 12 Months Ended
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Dec. 31, 2020
Income Tax Disclosure [Abstract] |
Income Taxes | 13. Income Taxes Schlumberger operates in more than 100 tax jurisdictions, where statutory tax rates generally vary from 0% to 35%. Income (loss) before taxes subject to United States and non-United States income taxes was as follows:
(Stated in millions) |
| 2020 |  |  | 2019 |  |  | 2018 |
United States | $ | (4,394 | ) |  | $ | (8,991 | ) |  | $ | (55 | )
Outside United States |  | (6,904 | ) |  |  | (1,427 | ) |  |  | 2,679 |
| $ | (11,298 | ) |  | $ | (10,418 | ) |  | $ | 2,624 |
Schlumberger recorded net pretax charges of $12.515 billion in 2020 ($3.961 billion in the US and $8.554 billion outside the US); $12.901 billion in 2019 ($8.769 billion in the US and $4.132 billion outside the US); and $141 million in 2018 ($102 million in the US and $39 million outside the US). These charges and credits are included in the table above and are more fully described in Note 3 – Charges and Credits. The components of net deferred tax assets (liabilities) were as follows:
(Stated in millions) |
| 2020 |  |  | 2019 |
Intangible assets | $ | (881 | ) |  | $ | (1,790 | )
Net operating losses |  | 421 |  |  |  | 144 |
Fixed assets, net |  | 151 |  |  |  | 434 |
Inventories |  | 59 |  |  |  | 155 |
Investments in non-US subsidiaries |  | (171 | ) |  |  | (220 | )
Foreign tax credits |  | - |  |  |  | 312 |
Other, net |  | 402 |  |  |  | 474 |
| $ | (19 | ) |  | $ | (491 | )
The deferred tax balances at December 31, 2020 and 2019 were net of valuation allowances relating to net operating losses in certain countries of $127 million and $82 million, respectively. Additionally, the deferred tax balances at December 31, 2020 were net of valuation allowances relating to foreign tax credits and capital losses of $106 million and $54 million, respectively. Approximately $353 million of the $421 million deferred tax asset relating to net operating losses at December 31, 2020 can be carried forward indefinitely. The vast majority of the remaining balance expires at various dates between 2030 and 2040. Schlumberger generally does not provide for taxes related to the undistributed earnings of its subsidiaries because such earnings either would not be taxable when remitted or they are considered to be indefinitely reinvested. The components of Tax expense (benefit) were as follows:
(Stated in millions) |
| 2020 |  |  | 2019 |  |  | 2018 |
Current: |  |  |  |  |  |  |  |  |  |  |
United States-Federal | $ | 21 |  |  | $ | (81 | ) |  | $ | 124 |
United States-State |  | 5 |  |  |  | 11 |  |  |  | (50 | )
Outside United States |  | 410 |  |  |  | 770 |  |  |  | 618 |
|  | 436 |  |  |  | 700 |  |  |  | 692 |
Deferred: |  |  |  |  |  |  |  |  |  |  |
United States-Federal | $ | (824 | ) |  | $ | (660 | ) |  | $ | (143 | )
United States-State |  | (67 | ) |  |  | (93 | ) |  |  | (4 | )
Outside United States |  | (563 | ) |  |  | (257 | ) |  |  | (69 | )
Valuation allowance |  | 206 |  |  |  | (1 | ) |  |  | (29 | )
|  | (1,248 | ) |  |  | (1,011 | ) |  |  | (245 | )
| $ | (812 | ) |  | $ | (311 | ) |  | $ | 447 |
A reconciliation of the United States statutory federal tax rate to the consolidated effective tax rate follows:
| 2020 |  |  | 2019 |  |  | 2018 |
US federal statutory rate |  | 21 | % |  |  | 21 | % |  |  | 21 | %
State tax |  | - |  |  |  | - |  |  |  | (2 | )
Non-US income taxed at different rates |  | - |  |  |  | - |  |  |  | (2 | )
Charges and credits (See Note 3) |  | (14 | ) |  |  | (19 | ) |  |  | - |
Other |  | - |  |  |  | 1 |  |  |  | - |
|  | 7 | % |  |  | 3 | % |  |  | 17 | %
A number of the jurisdictions in which Schlumberger operates have tax laws that are not fully defined and are evolving. Schlumberger’s tax filings are subject to regular audit by the tax authorities. These audits may result in assessments for additional taxes that are resolved with the tax authorities or, potentially, through the courts. Tax liabilities are recorded based on estimates of additional taxes that will be due upon the conclusion of these audits. Due to the uncertain and complex application of tax regulations, the ultimate resolution of audits may result in liabilities which could be materially different from these estimates. A reconciliation of the beginning and ending amount of liabilities associated with uncertain tax positions for the years ended December 31, 2020, 2019 and 2018 is as follows:
(Stated in millions) |
| 2020 |  |  | 2019 |  |  | 2018 |
Balance at beginning of year | $ | 1,301 |  |  | $ | 1,433 |  |  | $ | 1,393 |
Additions based on tax positions related to the current year |  | 76 |  |  |  | 86 |  |  |  | 88 |
Additions for tax positions of prior years |  | 78 |  |  |  | 65 |  |  |  | 145 |
Impact of changes in exchange rates |  | (3 | ) |  |  | 2 |  |  |  | (41 | )
Settlements with tax authorities |  | (15 | ) |  |  | (50 | ) |  |  | (22 | )
Reductions for tax positions of prior years |  | (87 | ) |  |  | (176 | ) |  |  | (57 | )
Reductions due to the lapse of the applicable statute of limitations |  | (79 | ) |  |  | (59 | ) |  |  | (73 | )
| $ | 1,271 |  |  | $ | 1,301 |  |  | $ | 1,433 |
The amounts above exclude accrued interest and penalties of $184 million, $188 million and $205 million at December 31, 2020, 2019 and 2018, respectively. Schlumberger classifies interest and penalties relating to uncertain tax positions within Tax expense (benefit) in the Consolidated Statement of Income (Loss). The following table summarizes the tax years that are either currently under audit or remain open and subject to examination by the tax authorities in the most significant jurisdictions in which Schlumberger operates:
Canada | 2013 - 2020
Ecuador | 2016 - 2020
Mexico | 2012 - 2020
Norway | 2015 - 2020
Russia | 2016 - 2020
Saudi Arabia | 2015 - 2020
United Kingdom | 2017 - 2020
United States | 2017 - 2020
In certain of the jurisdictions noted above, Schlumberger operates through more than one legal entity, each of which may have different open years subject to examination. The table above presents the open years subject to examination for the most material of the legal entities in each jurisdiction. Additionally, it is important to note that tax years are technically not closed until the statute of limitations in each jurisdiction expires. In the jurisdictions noted above, the statute of limitations can extend beyond the open years subject to examination.

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