4.3.17Deferred Tax Assets and Liabilities

The deferred tax assets and liabilities and associated net positions are summarized as follows:

Deferred tax positions (summary)

Deferred tax assets increased by US$64 million during the current year, mainly due to the recognition of deferred tax assets for losses carried forward for the period and the partial reversal of the valuation allowance for Swiss tax goodwill (refer to 4.3.10 Income Tax Expense).

Movements in net deferred tax positions

Expected realization and settlement of deferred tax positions is within 20 years. The deferred tax losses are expected to be recovered, based on the anticipated profit in the applicable jurisdiction. The Company has US$26 million (2023: US$48 million) of deferred tax assets unrecognized in 2024, due to the valuation allowance of current tax losses. The term in which these unrecognized deferred tax assets could be settled depends on the respective tax jurisdiction and ranges from five years to an unlimited period of time.

On a cumulative basis, a total amount of US$2,221 million at the end of 2024 (2023: US$2,306 million) corresponds to deferred tax assets basis unrecognized on temporary differences, unused tax losses and tax credits.

Deferred tax in connection with unused tax losses carried forward, temporary differences and tax credits:

‘Unused tax losses carried forward, temporary differences and tax credit not recognized as a deferred tax asset’ remained in line with the previous year. A significant portion of this balance relates to the deferred tax asset in relation to a tax goodwill in Switzerland. In determining the taxable profits, the Company updated its assessment and modeling to determine that an amount of US$1,995 million could possibly be unrecoverable, which is concluded based on the assessment of profitability and commercial uncertainties (i.e. future awards) impacting future profits. Based on the uncertainty of recovering this tax asset in future years in light of applicable enacted Swiss tax regulations, the Company determined the expected value based on a range of possible outcomes. As a result, the Company as of December 31, 2024, reassessed the deferred tax asset in related to the tax goodwill in Switzerland net of US$157 million in accordance with IAS 12 and IFRIC 23.

Expiry date on deferred tax assets unrecognized on temporary differences, unused tax losses and tax credits:

Deferred tax assets per location are as follows:

Deferred tax positions per location

Following the acquisition of shares in certain joint ventures associated to operations in Angola the company has recognized a deferred tax liability of US$20 million in 2024.