Income taxes refund received

  
Cincinnati Global operates in the United Kingdom and as such, is subject to tax in that jurisdiction. The statute of limitations for tax return review by Her Majesty’s Revenue and Customs (HMRC) has closed for tax years ended December 31, 2019 and earlier. There are currently no tax returns under review by HMRC.   
Income taxes paid in our consolidated statements of cash flows are shown net of refunds received. We received no refunds in either 2021 or 2020 and $94 million in 2019.  
Cincinnati GlobalCincinnati Global's operating results for the year ended December 31, 2021, decreased their net deferred assets by $3 million with an offsetting decrease of $3 million to their valuation allowance. At December 31, 2021, Cincinnati Global had a net deferred tax asset of $53 million and an offsetting valuation allowance of $53 million.  
Deferred tax assets are reduced by a valuation allowance when management believes it is more likely than not that some, or all, of the deferred tax assets will not be realized. After considering all positive and negative evidence, we believe it was appropriate to set up a valuation allowance for purposes of our opening Cincinnati Global balance sheet and is appropriate to carry a valuation allowance at December 31, 2021, 2020 and 2019.  
The following is a tabular reconciliation of the total amounts of our Cincinnati Global valuation allowance. 

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (Dollars in millions) | Years ended December 31, |
|  |  | 2021 |  | 2020 |  | 2019 |  |  |
| Valuation allowance, January 1 |  | $ | 56  |  |  | $ | 41  |  |  | $ | —  |  |  |  |
| Acquisition accounting amount |  | —  |  |  | —  |  |  | 55  |  |  |  |
| Current year operations |  | (3) |  |  | 15  |  |  | (14) |  |  |  |
| Valuation allowance, December 31 |  | $ | 53  |  |  | $ | 56  |  |  | $ | 41  |  |  |  |
|  |  |  |  |  |  |  |  |  |

  
At December 31, 2021, and 2020, Cincinnati Global had operating loss carryforwards in the United States of $8 million and $26 million and in the United Kingdom of $130 million and $108 million, respectively. These Cincinnati Global losses can only be utilized within the Cincinnati Global group in both the United States and in the United Kingdom and cannot offset the income of our domestic operations in the United States.Cincinnati Financial Corporation - 2021 10-K - Page 160
