By Mark Maurer and Richard Rubin
Netflix paid $1.12 billion in income taxes to the U.S. government in 2025, information that companies haven't typically disclosed -- until now.
The streaming giant became one of the first large public companies to file an annual report that complied with a new accounting rule requiring more detail about corporate tax payments. The disclosure showed that most of Netflix's cash income-tax payments are in the U.S., where the bulk of its corporate activity is located, and that it made significant payments to Brazil and South Korea.
New requirements set by the Financial Accounting Standards Board in 2023 recently took effect. In annual financial reports, companies now must break out income taxes paid to authorities at the federal, state and foreign levels. Because most companies report earnings on a calendar-year basis, a wave of these disclosures will arrive over the next month for 2025. Private companies don't have to comply for another year, though any company can adopt the requirements early.
Investors and nonprofit groups sought the new disclosures to boost transparency. Many companies, meanwhile, argued that additional information would put them at a competitive disadvantage by exposing tax strategies.
"A lot of the value here is going to be the questions that this information provokes," said Matt Gardner, a senior fellow at the Institute on Taxation and Economic Policy, a progressive group that criticizes corporate tax avoidance.
The cash tax payment doesn't necessarily translate directly to a company's tax rate. That's because payments made in one year can stem from past years' activities, such as the conclusion of an audit. For example, Netflix's $195 million payment to South Korea is for several prior tax years, the company said.
Chip maker Intel and oil-services company SLB also disclosed the new information in recent reports.
"My guess is going forward, we will learn things about where these companies are, and see more examples of interesting tax payments to countries," said Jeff Hoopes, an accounting professor at the University of North Carolina.
There are other rule changes: Along with the overall amount of cash taxes, if a particular jurisdiction represents more than 5% of total income taxes paid for the year, companies have to identify that jurisdiction and specify the amount in their annual reports. Public companies must provide more detail on the differences between statutory tax rates and what they pay. The actual rate is usually lower because it includes the effects of tax credits and other breaks.
Investors are watching for the data in newly standardized tax-rate tables, which will help them compare businesses more easily.
Public companies now have to show how things such as state and local income taxes, foreign taxes, tax credits and new tax laws contribute to the difference between their statutory tax rate and their actual one, by providing the percentages and dollar amounts for those categories.
"The hope is that analysts will be able to compare the way the tax system treats different companies, in an apples-to-apples way," Gardner said.
The early disclosures also don't explain everything that's behind a company's tax bill. Nearly three-quarters of SLB's cash paid for income taxes in 2025 fell into the "other" bucket, suggesting its taxes in several countries didn't exceed the 5% threshold. Although Intel paid more than $1 billion in federal income taxes, it received net state income tax refunds of $7 million.
"These disclosures, as we expected, lack substantial context for you to understand what they're actually communicating," said Sandy Peters, who leads the financial reporting policy group at the CFA Institute, which represents investment professionals. "Information is only relevant if it has appropriate context."
Intel declined to comment and SLB didn't respond to requests for comment.
Before the new rule, public companies had to report the total worldwide amount of cash income taxes they pay at least once a year.
As before, the businesses provide their total pretax net income for U.S. and foreign operations, as well as their tax expense or benefit. Those are generally accrual accounting measures, which reflect the effects of actions that happened during the year, not actual cash payments. They aren't required to break out their tax and profit data for every country. Companies also have had to disclose their effective tax rate, which is the ratio between their tax expense and pretax income.
Companies need to be able to collect tax data at a granular level and have disclosure controls and procedures in place to identify if any of their jurisdictions were large enough to meet the 5% threshold, said Steve Soter, a vice president at financial-reporting software maker Workiva.
"For large multinational companies, it is a significant lift," Soter said.
Write to Mark Maurer at mark.maurer@wsj.com and Richard Rubin at richard.rubin@wsj.com
(END) Dow Jones Newswires
January 27, 2026 15:59 ET (20:59 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
Comments