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Income taxes (Tables) | 12 Months Ended
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Dec. 31, 2022
Income Tax Disclosure [Abstract] |
Components of (Provision for) Benefit from Income Taxes | The components of the income tax expense are as follows, whereby ‘Income tax expense Netherlands’ represents the total tax expense on taxable income generated by our entities in the Netherlands and ‘Income tax expense Foreign’ represents the total tax expense on taxable income generated by our non-Dutch group entities. Hereby ‘total income tax expense Netherlands’ includes withholding tax expense withheld at source on income paid by non-Dutch entities to the Netherlands.
Year ended December 31 (€, in millions) | 2020 | 2021 |  | 2022
Netherlands | 3,574.6 |  | 5,982.8 |  |  | 5,881.0 |
Foreign | 442.0 |  | 722.7 |  |  | 575.1 |
Income before income taxes | 4,016.6 |  | 6,705.5 |  |  | 6,456.1 |
Income tax expense current | (407.7) |  | (865.0) |  |  | (818.4) |
Income tax expense deferred | 1.4 |  | (28.6) |  |  | (44.4) |
Income tax expense Netherlands | (406.3) |  | (893.6) |  |  | (862.8) |
Income tax expense current | (375.3) |  | (523.5) |  |  | (678.3) |
Income tax expense deferred | 230.1 |  | 395.7 |  |  | 571.2 |
Income tax expense Foreign | (145.2) |  | (127.8) |  |  | (107.1) |
Total income tax expense current | (783.0) |  | (1,388.5) |  |  | (1,496.7) |
Total income tax expense deferred | 231.5 |  | 367.1 |  |  | 526.8 |
Total income tax expense | (551.5) |  | (1,021.4) |  |  | (969.9) |
Current and deferred tax expense can be further broken down into:
Year ended December 31 (€, in millions) | 2020 | 2021 |  | 2022
Current year tax expense | (743.7) |  | (1,367.2) |  |  | (1,440.9) |
Prior year tax expense | (39.3) |  | (21.3) |  |  | (55.8) |
Total current tax expense | (783.0) |  | (1,388.5) |  |  | (1,496.7) |
Year ended December 31 (€, in millions) | 2020 | 2021 |  | 2022
Changes to recognition of operating losses and tax credits | (56.9) |  | (37.2) |  |  | (41.2) |
Prior year tax expense | 27.0 |  | (2.4) |  |  | 79.2 |
Tax rate changes | 15.0 |  | 1.5 |  |  | (1.1) |
Origination and reversal of temporary differences, operating losses and tax credits | 246.4 |  | 405.2 |  |  | 489.9 |
Total deferred tax expense | 231.5 |  | 367.1 |  |  | 526.8 |
Reconciliation Between (Provision for) Benefit from Income Taxes | The reconciliation of the income tax expense from the Dutch statutory rate to the effective income tax rate is as follows:
Year ended December 31 (€, in millions) | 2020 | %1 | 2021 | %1 |  | 2022 | %1
Income before income taxes | 4,016.6 |  | 100.0 | % | 6,705.5 |  | 100.0 | % |  | 6,456.1 |  | 100.0 | %
Income tax expense based on ASML’s domestic rate | (1,004.1) |  | 25.0 | % | (1,676.4) |  | 25.0 | % |  | (1,665.7) |  | 25.8 | %
Effects of tax rates in foreign jurisdictions | 0.9 |  | — | % | (4.6) |  | 0.1 | % |  | 13.0 |  | (0.2) | %
Adjustments in respect of tax-exempt income | 0.2 |  | — | % | — |  | — | % |  | — |  | — | %
Adjustments in respect of tax incentives | 510.4 |  | (12.7) | % | 727.3 |  | (10.8) | % |  | 741.2 |  | (11.5) | %
Adjustments in respect of prior years’ current taxes | (39.3) |  | 1.0 | % | (21.3) |  | 0.3 | % |  | (55.8) |  | 0.9 | %
Adjustments in respect of prior years’ deferred taxes | 27.0 |  | (0.7) | % | (2.4) |  | — | % |  | 79.2 |  | (1.2) | %
Movements in the liability for unrecognized tax benefits | (41.0) |  | 1.0 | % | (21.6) |  | 0.3 | % |  | (9.9) |  | 0.2 | %
Tax effects in respect of acquisition/restructuring related items | — |  | — | % | 35.9 |  | (0.5) | % |  | — |  | — | %
Change in valuation allowance | (56.9) |  | 1.4 | % | (37.2) |  | 0.6 | % |  | (41.2) |  | 0.6 | %
Equity method investments | (20.9) |  | 0.5 | % | (46.7) |  | 0.7 | % |  | (38.3) |  | 0.6 | %
Effect of change in tax rates | 15.0 |  | (0.4) | % | 1.5 |  | — | % |  | (1.1) |  | — | %
Other (credits) and non-tax deductible items | 57.2 |  | (1.4) | % | 24.1 |  | (0.4) | % |  | 8.7 |  | (0.1) | %
Income tax expense | (551.5) |  | 13.7 | % | (1,021.4) |  | 15.2 | % |  | (969.9) |  | 15.0 | %
1.As a percentage of income before income taxes.
Liability for Unrecognized Tax Benefits and Deferred Tax Position Recorded on Consolidated Balance Sheets | The liability for unrecognized tax benefits and related accrued interest and penalties and total deferred tax position recorded on the Consolidated Balance Sheets is as follows:
Year ended December 31 (€, in millions) | 2020 | 2021 |  | 2022
Liability for unrecognized tax benefits | (200.4) |  | (205.9) |  |  | (215.5) |
Deferred tax assets | 671.5 |  | 1,098.7 |  |  | 1,672.8 |
Deferred tax liabilities | (37.9) |  | (34.7) |  |  | (51.5) |
Deferred and other tax assets (liabilities) | 433.2 |  | 858.1 |  |  | 1,405.8 |
Reconciliation of Beginning and Ending Balance of Liability for Unrecognized Tax Benefits | A reconciliation of the beginning and ending balance of the liability for unrecognized tax benefits (excluding interest and penalties) is as follows:
Year ended December 31 (€, in millions) | 2020 | 2021 |  | 2022
Balance as at January 1 | (150.7) |  | (138.0) |  |  | (144.3) |
Gross presentation for different tax jurisdictions | (27.3) |  | — |  |  | — |
Gross increases – tax positions in prior period | (66.6) |  | (21.6) |  |  | (11.7) |
Gross decreases – tax positions in prior period | 0.5 |  | 8.9 |  |  | 2.0 |
Gross increases – tax positions in current period | (21.6) |  | (18.8) |  |  | (23.1) |
Settlements | 106.6 |  | 2.5 |  |  | 6.8 |
Lapse of statute of limitations | 14.5 |  | 32.0 |  |  | 13.2 |
Effect of changes in exchange rates | 6.6 |  | (9.3) |  |  | (2.9) |
Total liability for unrecognized tax benefits | (138.0) |  | (144.3) |  |  | (160.0) |
Balance of accrued interest and penalties | (62.4) |  | (61.6) |  |  | (55.5) |
Total liabilities for unrecognized tax benefits including interest and penalties | (200.4) |  | (205.9) |  |  | (215.5) |
Summary of Income Tax Examinations | The years for which tax returns are still open for examination for respective jurisdictions are as follows:
Country | Years
Netherlands | 2019-2022
US | 2017-2022
Taiwan | 2017-2022
South Korea | 2019-2022
China | 2012-2022
Composition of Deferred Tax Assets and Liabilities Reconciled in Consolidated Balance Sheets | The composition of total deferred tax assets and liabilities reconciled to the classification in the Consolidated Balance Sheets is:
Deferred taxes (€, in millions) | January 1, 2022 |  | Credits and other | Consolidated Statements of Operations | Income tax recognized in Other Comprehensive Income | Effect of changes in exchange rates |  | December 31, 2022
Deferred tax assets: |  |  |  |  |  |  |  |
Capitalized R&D expenditures | 420.4 |  |  | — |  | 151.2 |  | — |  | 20.5 |  |  | 592.1 |
R&D & other tax credit carry forwards | 162.7 |  |  | 23.7 |  | 20.6 |  | — |  | 6.4 |  |  | 213.4 |
Inventories | 31.5 |  |  | — |  | 12.5 |  | — |  | 1.2 |  |  | 45.2 |
Contract liabilities | 423.2 |  |  | — |  | 400.8 |  | — |  | (3.2) |  |  | 820.8 |
Accrued and other liabilities | 98.1 |  |  | — |  | 4.4 |  | — |  | 3.3 |  |  | 105.8 |
Standard warranty reserve | 11.3 |  |  | — |  | (4.1) |  | — |  | 0.9 |  |  | 8.1 |
Operating loss carry forwards | 7.4 |  |  | — |  | (2.8) |  | — |  | (0.1) |  |  | 4.5 |
Property, plant and equipment | 18.6 |  |  | — |  | 1.7 |  | — |  | (1.4) |  |  | 18.9 |
Lease liabilities | 23.2 |  |  | — |  | 3.1 |  | — |  | 1.1 |  |  | 27.4 |
Other intangible assets | 143.5 |  |  | — |  | (18.7) |  | — |  | — |  |  | 124.8 |
Share-based payments | 9.6 |  |  | — |  | 1.2 |  | — |  | 0.6 |  |  | 11.4 |
Other temporary differences | 27.5 |  |  | — |  | 3.7 |  | (6.5) |  | (1.4) |  |  | 23.3 |
Total deferred tax assets, gross | 1,377.0 |  |  | 23.7 |  | 573.6 |  | (6.5) |  | 27.9 |  |  | 1,995.7 |
Valuation allowance 1 | (167.6) |  |  | — |  | (41.2) |  | — |  | (6.6) |  |  | (215.4) |
Total deferred tax assets, net | 1,209.4 |  |  | 23.7 |  | 532.4 |  | (6.5) |  | 21.3 |  |  | 1,780.3 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Other intangible assets | (79.9) |  |  | — |  | 19.8 |  | — |  | (5.3) |  |  | (65.4) |
Goodwill | (20.9) |  |  | — |  | (7.9) |  | — |  | — |  |  | (28.8) |
Right-of-use assets | (23.2) |  |  | — |  | (3.1) |  | — |  | (1.1) |  |  | (27.4) |
Property, plant and equipment | (10.9) |  |  | — |  | 1.5 |  | — |  | (0.4) |  |  | (9.8) |
Contract liabilities | (7.9) |  |  | — |  | (8.4) |  | — |  | — |  |  | (16.3) |
Long-term debt | (1.5) |  |  | — |  | — |  | — |  | — |  |  | (1.5) |
Other temporary differences | (1.1) |  |  | — |  | (7.5) |  | (2.1) |  | 0.9 |  |  | (9.8) |
Total deferred tax liabilities | (145.4) |  |  | — |  | (5.6) |  | (2.1) |  | (5.9) |  |  | (159.0) |
Net deferred tax assets (liabilities) | 1,064.0 |  |  | 23.7 |  | 526.8 |  | (8.6) |  | 15.4 |  |  | 1,621.3 |
Classified as: |  |  |  |  |  |  |  |
Deferred tax assets – non-current | 1,098.7 |  |  |  |  |  |  |  | 1,672.8 |
Deferred tax liabilities – non-current | (34.7) |  |  |  |  |  |  |  | (51.5) |
Net deferred tax assets (liabilities) | 1,064.0 |  |  |  |  |  |  |  | 1,621.3 |
1.The valuation allowance disclosed above relates to R&D and other tax credit carry forwards and operating loss carry forwards that may not be realized.
Deferred taxes (€, in millions) | January 1, 2021 |  | Credits and other | Consolidated Statements of Operations | Income tax recognized in Other Comprehensive Income | Effect of changes in exchange rates |  | December 31, 2021
Deferred tax assets: |  |  |  |  |  |  |  |
Capitalized R&D expenditures | 287.1 |  |  | — |  | 106.8 |  | — |  | 26.5 |  |  | 420.4 |
R&D & other tax credit carry forwards | 117.2 |  |  | 21.4 |  | 16.4 |  | — |  | 7.7 |  |  | 162.7 |
Inventories | 37.2 |  |  | — |  | (7.2) |  | — |  | 1.5 |  |  | 31.5 |
Contract liabilities | 125.2 |  |  | — |  | 288.0 |  | — |  | 10.0 |  |  | 423.2 |
Accrued and other liabilities | 87.8 |  |  | — |  | 5.7 |  | — |  | 4.6 |  |  | 98.1 |
Standard warranty reserve | 16.4 |  |  | — |  | (6.3) |  | — |  | 1.2 |  |  | 11.3 |
Operating loss carry forwards | 27.1 |  |  | — |  | (19.9) |  | — |  | 0.2 |  |  | 7.4 |
Property, plant and equipment | 26.9 |  |  | — |  | (10.8) |  | — |  | 2.5 |  |  | 18.6 |
Lease liabilities | 6.5 |  |  | — |  | 16.2 |  | — |  | 0.5 |  |  | 23.2 |
Other intangible assets | 143.5 |  |  | — |  | — |  | — |  | — |  |  | 143.5 |
Share-based payments | 7.2 |  |  | — |  | 1.8 |  | — |  | 0.6 |  |  | 9.6 |
Other temporary differences | 23.9 |  |  | — |  | 7.5 |  | (1.0) |  | (2.9) |  |  | 27.5 |
Total deferred tax assets, gross | 906.0 |  |  | 21.4 |  | 398.2 |  | (1.0) |  | 52.4 |  |  | 1,377.0 |
Valuation allowance 1 | (122.5) |  |  | — |  | (37.2) |  | — |  | (7.9) |  |  | (167.6) |
Total deferred tax assets, net | 783.5 |  |  | 21.4 |  | 361.0 |  | (1.0) |  | 44.5 |  |  | 1,209.4 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Other intangible assets | (93.9) |  |  | 2.9 |  | 17.1 |  | — |  | (6.0) |  |  | (79.9) |
Goodwill | (15.6) |  |  | — |  | (5.3) |  | — |  | — |  |  | (20.9) |
Right-of-use assets | (6.5) |  |  | — |  | (16.2) |  | — |  | (0.5) |  |  | (23.2) |
Property, plant and equipment | (5.4) |  |  | — |  | (4.3) |  | — |  | (1.2) |  |  | (10.9) |
Contract liabilities | (18.2) |  |  | — |  | 10.3 |  | — |  | — |  |  | (7.9) |
Long-term debt | (1.6) |  |  | — |  | 0.1 |  | — |  | — |  |  | (1.5) |
Other temporary differences | (8.7) |  |  | 2.5 |  | 4.4 |  | — |  | 0.7 |  |  | (1.1) |
Total deferred tax liabilities | (149.9) |  |  | 5.4 |  | 6.1 |  | — |  | (7.0) |  |  | (145.4) |
Net deferred tax assets (liabilities) | 633.6 |  |  | 26.8 |  | 367.1 |  | (1.0) |  | 37.5 |  |  | 1,064.0 |
Classified as: |  |  |  |  |  |  |  |
Deferred tax assets – non-current | 671.5 |  |  |  |  |  |  |  | 1,098.7 |
Deferred tax liabilities – non-current | (37.9) |  |  |  |  |  |  |  | (34.7) |
Net deferred tax assets (liabilities) | 633.6 |  |  |  |  |  |  |  | 1,064.0 |
1.The valuation allowance disclosed above relates to R&D and other tax credit carry forwards and operating loss carry forwards that may not be realized.

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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 https://asc.fasb.org/extlink&oid=121826272&loc=d3e32639-109319 + Details
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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 12 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32687-109319 + Details
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- Definition Tabular disclosure of income tax examinations that an enterprise is currently subject to or that have been completed in the current period typically including a description of the examination, the jurisdiction conducting the examination, the tax year(s) under examination, the likelihood of an unfavorable settlement, the range of possible losses, the liability recorded, the increase or decrease in the liability from the prior period, and any penalties and interest that have been recorded. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32718-109319 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 55 -Paragraph 217 -URI https://asc.fasb.org/extlink&oid=126976462&loc=d3e36027-109320 + Details
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