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Note 16. Income Taxes US Stat Rec (Tables)

12 Months Ended

Sep. 30, 2017

Income Tax Examination [Line Items]

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

The reconciliation between the Irish statutory income tax rate, and Adient’s effective tax rate is as follows:

		Year Ended September 30,
(in millions)		2017
Tax expense at Ireland statutory rate		$	133
State income taxes, net of federal benefit		(10		)
Foreign tax rate differential		(67		)
Notional interest deduction		(28		)
Credits and incentives		(13		)
Gain on previously-held interest		(19		)
Repatriation of foreign earnings		30
Foreign exchange		(11		)
Impact of enacted tax rate changes		10
Change in uncertain tax positions		50
Change in valuation allowance		21
Other		3
Income tax provision		$	99

The effective rate is lower than the statutory rate of 12.5% primarily due to benefits from global tax planning, notional interest deductions, foreign tax rate differentials, and foreign exchange, partially offset with a first quarter fiscal 2017 tax law change in Hungary, repatriation of foreign earnings, and changes in uncertain tax positions and valuation allowances. No items included in the other category are individually, or when appropriately aggregated, significant.

The foreign tax rate differential benefit is primarily driven by the pretax book income of nonconsolidated partially-owned affiliates whose corresponding income tax expense is netted against equity income on the consolidated statements of income. Excluding nonconsolidated partially-owned affiliates, foreign tax rate differentials have a $21 million favorable impact on the effective tax rate as a result of losses earned in jurisdictions where the statutory rate is greater than 12.5%.

The reconciliation between the U.S. federal income tax rate, and Adient’s effective tax rate was as follows:

		Year Ended September 30,
(in millions)		2016				2015
Tax expense at the U.S. federal statutory rate		$	136			$	336
State income taxes, net of federal benefit		—				15
Foreign income tax expense at different rates and foreign losses without tax benefits		(92		)		(13		)
U.S. tax on foreign income		(207		)		(252		)
U.S. credits and incentives		(7		)		(6		)
Impacts of transactions and business divestitures		1,988				356
Reserve and valuation allowance adjustments		14				(13		)
Other		7				(5		)
Income tax provision		$	1,839			$	418

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Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

No definition available.

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- Definition

Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 12
-URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32687-109319

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