SEC Filings

Micron's $11.22 Billion Singapore Tax Cut Shrank To $2.21 Billion After A Minimum Tax

Micron's 10-K shows $9.03 billion of Pillar Two top-up taxes offset most of its Singapore incentives, with $9.82 billion of tax still payable.

Matteo Parrino Jonathan Ponciano

Matteo Parrino, Jonathan Ponciano

— 2 min read
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Micron's $11.22 Billion Singapore Tax Cut Shrank To $2.21 Billion After A Minimum Tax

Singapore tax incentives cut Micron's income tax provision by $11.22 billion in fiscal 2026, but $9.03 billion of top-up taxes under the global Pillar Two minimum tax erased most of it, according to the company's 10-K. The net benefit was $2.21 billion, or $1.93 per diluted share.

What the tax footnote says

The 10-K puts the effective tax rate at 14.8%, against 11.6% a year earlier. Management attributes the change mainly to the 15% minimum tax, which Singapore enacted effective for Micron in 2026 and which it says largely offsets the benefit of its Singapore incentive arrangements.

The net benefit was $1.05 billion, or $0.93 per diluted share, in fiscal 2025. The incentives expire, in whole or in part, at various dates through 2034.

The FY2025 10-K said the company expected a tax rate in the mid to high-teens percentage range from 2026 and gave no dollar figure for the effect.

The bill has not been paid. Income taxes payable inside other noncurrent liabilities stood at $9.82 billion at fiscal year-end, up from $648 million a year earlier. The cash flow statement shows only $1.254 billion of income taxes paid in 2026, and management says the rise in noncurrent liabilities was largely due to higher noncurrent income taxes payable tied to Pillar Two.

Cash that is not all earned

Micron's cash and marketable investments reached $73.45 billion, from $11.94 billion a year earlier. Part of that is customer money: $12.75 billion of deposits from strategic customer agreements, with repayment of almost all due in 2029 through 2031. Noncurrent customer contract liabilities rose to $12.895 billion from $142 million.

Most of these take-or-pay contracts carry price bands. If a customer meets its minimum purchases, Micron returns the deposit. If not, it may keep all or part of it as revenue. Remaining performance obligations were about $134 billion, versus an amount the company called not material a year earlier. Management says it expects margins on band-priced agreements, even at floor prices, to be meaningfully above its past peak quarterly margins.

Buyback ceiling and what to watch

On October 8, the Board raised the maximum discretionary repurchase authorization to $35.16 billion, effective December 9, 2026. Repurchases must follow the company's CHIPS Act funding agreements. Micron bought back $650 million of stock in 2026. The stock traded at $1,024.31 in Friday trading, down 1.11% as of 10:53 a.m. ET (market data).

The filing also reports net income of $84.969 billion on revenue of $133.188 billion.

The next thing to check is whether the $9.82 billion of tax payable begins moving out as cash, with the higher buyback ceiling taking effect December 9.

Sources

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