Undistributed Earnings of Foreign Subsidiaries



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| [Table of Contents](#i4a1c883199354127b0e9b0ddb9e84eb8_7) |  | Notes to Consolidated Financial Statements — (continued)(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed) |  |
| ACCENTURE 2022 FORM 10-K |  | F-27 |
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11. Income Taxes

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|   | Fiscal |
|   | 2022 |  | 2021 |  | 2020 |
| Current taxes |  |  |  |  |  |
| U.S. federal | $ | 298,685  |  |  | $ | 218,064  |  |  | $ | 99,280  |  |
| U.S. state and local | 152,862  |  |  | 95,662  |  |  | 26,425  |  |
| Non-U.S. | 1,968,954  |  |  | 1,395,915  |  |  | 1,292,362  |  |
| Total current tax expense | 2,420,501  |  |  | 1,709,641  |  |  | 1,418,067  |  |
| Deferred taxes |  |  |  |  |  |
| U.S. federal | (202,318) |  |  | 7,767  |  |  | 21,532  |  |
| U.S. state and local | (48,597) |  |  | (5,400) |  |  | 8,525  |  |
| Non-U.S. | 37,621  |  |  | 58,563  |  |  | 140,894  |  |
| Total deferred tax (benefit) expense  | (213,294) |  |  | 60,930  |  |  | 170,951  |  |
| Total | $ | 2,207,207  |  |  | $ | 1,770,571  |  |  | $ | 1,589,018  |  |

The components of Income before income taxes are as follows: 

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|   | Fiscal |
|   | 2022 |  | 2021 |  | 2020 |
| U.S. sources | $ | 1,644,380  |  |  | $ | 1,597,820  |  |  | $ | 1,352,968  |  |
| Non-U.S. sources | 7,551,787  |  |  | 6,163,296  |  |  | 5,421,363  |  |
| Total | $ | 9,196,167  |  |  | $ | 7,761,116  |  |  | $ | 6,774,331  |  |

The reconciliation of the U.S. federal statutory income tax rate to our effective income tax rate is as follows: 

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|   | Fiscal |
|   | 2022 |  | 2021 |  | 2020 (2) |
| U.S. federal statutory income tax rate | 21.0  | % |  | 21.0  | % |  | 21.0  | % |
| U.S. state and local taxes, net | 1.1  |  |  | 1.2  |  |  | 1.2  |  |
| Non-U.S. operations taxed at other rates | 0.8  |  |  | 1.1  |  |  | 1.2  |  |
| Final determinations (1) | (0.9) |  |  | (1.7) |  |  | (1.9) |  |
| Other net activity in unrecognized tax benefits | 3.0  |  |  | 2.8  |  |  | 2.4  |  |
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| Excess tax benefits from share based payments | (3.0) |  |  | (2.1) |  |  | (1.9) |  |
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| Other, net | 2.0  |  |  | 0.5  |  |  | 1.5  |  |
| Effective income tax rate | 24.0  | % |  | 22.8  | % |  | 23.5  | % |

(1)Final determinations include final agreements with tax authorities and expirations of statutes of limitations. (2)Prior period amounts have been reclassified to conform with the current period presentation. As of August 31, 2022, we had not recognized a deferred tax liability on approximately $2,400,000 of undistributed earnings for certain foreign subsidiaries, because these earnings are intended to be indefinitely reinvested. If such earnings were distributed, some countries may impose additional taxes. The unrecognized deferred tax liability (the amount payable if distributed) is approximately $120,000. Portions of our operations are subject to reduced tax rates or are free of tax under various tax holidays which expire in fiscal 2024. The income tax benefits attributable to the tax status of these subsidiaries were estimated to be approximately $29,000, $37,000 and $38,000 in fiscal 2022, 2021 and 2020, respectively.The revaluation of deferred tax assets and liabilities due to enacted changes in tax laws and tax rates did not have a material impact on our effective tax rate in fiscal 2022, 2021, or 2020.  
  
  
  

