Income taxes	6 Months Ended
Jun. 30, 2022
Income taxes	NOTE 11 – Income taxes: In the second quarter of 2022, Teva recognized a tax benefit of $900 million, on pre-tax loss of $1,160 million. In the second quarter of 2021, Teva recognized a tax expense of $98 million, on pre-tax income of $308 million. In the second quarter of 2022, one of Teva’s U.S. subsidiaries was determined to be insolvent for tax purposes (i.e., its liabilities exceeded the fair market value of its assets), mainly in light of its accumulated operational losses. Consequently, Teva will recognize on its 2022 tax return, a worthless stock deduction of approximately $4.2 billion, with related tax benefit of approximately $850 million. Teva’s tax rate for the second quarter of 2022 was mainly affected by the realization of losses related to its investment in one of its U.S. subsidiaries mentioned above, as well as impairments, legal settlements, adjustments to valuation allowances on deferred tax assets and interest expense disallowances. In the first six months of 2022, Teva recognized a tax benefit of $899 million, on pre-tax loss of $2,131 million. In the first six months of 2021, Teva recognized a tax expense of $159 million, on pre-tax income of $451 million. Teva’s tax rate for the first six months of 2022 was mainly affected by the realization of losses related to its investment in one of its U.S. subsidiaries mentioned above, as well as impairments, legal settlements, adjustments to valuation allowances on deferred tax assets and interest expense disallowances. The statutory Israeli corporate tax rate is 23% in 2022. Teva’s tax rate differs from the Israeli statutory tax rate, mainly due to generation of profits in various jurisdictions in which tax rates are different than the Israeli tax rate, interest expense disallowances, tax benefits in Israel and other countries, as well as infrequent or non-recurring items. Teva filed a claim seeking the refund of withholding taxes paid to the Indian tax authorities in 2012. Trial in this case is scheduled to begin in November 2022. A final and binding decision against Teva in this case may lead to an impairment of $133 million. The Israeli tax authorities issued tax assessment decrees for 2008-2012 and 2013-2016, challenging the Company’s positions on several issues. Teva has protested the 2008-2012 and 2013-2016 decrees before the Central District Court in Israel. In October 2021, the Central District Court in Israel held in favor of the Israeli tax authorities with respect to 2008-2011 decrees. The case with respect to 2012-2016 remains pending with similar legal claims. The October 2021 Central District Court decision found that Teva has a tax liability to the Israeli government for 2008-2011 of approximately $350 million, of which a portion is being paid in cash during 2022 and 2023, and the remaining portion is being offset by carried forward losses that Teva would otherwise be entitled to. Teva appealed the decision to the Israeli Supreme Court and expects the appeal hearings to begin in early 2023. The Company believes it has adequately provided for all of its uncertain tax positions, including those items currently under dispute, however, adverse results could be material.

NOTE 11 – Income taxes:

In the second quarter of 2022, Teva recognized a tax benefit of $900 million, on

pre-tax

loss of $1,160 million. In the second quarter of 2021, Teva recognized a tax expense of $98 million, on

pre-tax

income of $308

million.

In the second quarter of 2022, one of Teva’s U.S. subsidiaries was determined to be insolvent for tax purposes (i.e., its liabilities exceeded the fair market value of its assets), mainly in light of its accumulated operational losses. Consequently, Teva will recognize on its 2022 tax return, a worthless stock deduction of approximately $4.2 billion, with related tax benefit of approximately $850 million.

Teva’s tax rate for the second quarter of 2022 was mainly affected by the realization of losses related to its investment in one of its U.S. subsidiaries mentioned above, as well as impairments, legal settlements, adjustments to valuation allowances on deferred tax assets and interest expense disallowances.

In the first six months of 2022, Teva recognized a tax benefit of $899 million, on

pre-tax

loss of $2,131 million. In the first six months of 2021, Teva recognized a tax expense of $159 million, on

pre-tax

income of $451

million.

Teva’s tax rate for the first six months of 2022 was mainly affected by the realization of losses related to its investment in one of its U.S. subsidiaries mentioned above, as well as impairments, legal settlements, adjustments to valuation allowances on deferred tax assets and interest expense disallowances.

The statutory Israeli corporate tax rate is 23% in 2022. Teva’s tax rate differs from the Israeli statutory tax rate, mainly due to generation of profits in various jurisdictions in which tax rates are different than the Israeli tax rate, interest expense disallowances, tax benefits in Israel and other countries, as well as infrequent or

non-recurring

items.

Teva filed a claim seeking the refund of withholding taxes paid to the Indian tax authorities in 2012. Trial in this case is scheduled to begin in November 2022. A final and binding decision against Teva in this case may lead to an impairment of

$133 million.

The Israeli tax authorities issued tax assessment decrees for 2008-2012 and 2013-2016, challenging the Company’s positions on several issues. Teva has protested the 2008-2012 and 2013-2016 decrees before the Central District Court in Israel.

In October 2021, the Central District Court in Israel held in favor of the Israeli tax authorities with respect to 2008-2011 decrees. The case with respect to 2012-2016 remains pending with similar legal claims. The October 2021 Central District Court decision found that Teva has a tax liability to the Israeli government for 2008-2011 of approximately $350 million,

of which a portion is being paid in cash during 2022 and 2023, and the remaining portion is being offset by carried forward losses that Teva would otherwise be entitled to. Teva appealed the decision to the Israeli Supreme Court and expects the appeal hearings to begin in early 2023.

The Company believes it has adequately provided for all of its uncertain tax positions, including those items currently under dispute, however, adverse results could be material.