Taxation

12 Months Ended

Dec. 31, 2025

Income taxes paid (refund) [abstract]

6. Taxation6A. INCOME TAX

Income tax on the profit for the year comprises current and deferred tax. Income tax is recognised in the income statement except to the extent that it relates to

items recognised directly in equity.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the balance sheet date, and any

adjustments to tax payable in respect of previous years.

Current tax in the consolidated income statement will differ from the income tax paid in the consolidated cash flow statement primarily because of deferred tax

arising on temporary differences and payment dates for income tax occurring after the balance sheet date.

Unilever is subject to taxation in the many countries in which it operates. The tax legislation of these countries differs, is often complex and is subject to

interpretation by management and the government authorities. These matters of judgement give rise to the need to create provisions for tax payments that may

arise in future years with respect to transactions already undertaken. Provisions are made against individual exposures and take into account the specific

circumstances of each case, including the strength of technical arguments, recent case law decisions or rulings on similar issues and relevant external advice. The

provision is estimated based on one of two methods, the expected value method (the sum of the probability-weighted amounts in a range of possible outcomes) or

the single most likely amount method, depending on which is expected to better predict the resolution of the uncertainty.


Tax charge in income statement	€ million 2025	€ million 2024(a)	€ million 2023(a)
Current tax
Current year	(3,387)	(2,651)	(2,035)
Pillar 2 income taxes	(21)	(9)	–
Over/(under) provided in prior years	54	160	31
	(3,354)	(2,500)	(2,004)
Deferred tax
Origination and reversal of temporary differences	828	136	(16)
Changes in tax rates	(12)	(2)	6
Recognition of previously unrecognised losses brought forward	57	34	24
	873	168	14
	(2,481)	(2,332)	(1,990)

(a)The 2024 and 2023 comparatives have been restated from those previously published to reflect the demerger of our Ice Cream business (see note 21).

6A. INCOME TAX continued

The reconciliation between the computed weighted average rate of income tax expense, which is generally applicable to Unilever companies, and the actual rate of

taxation charged is as follows:


Reconciliation of effective tax rate	% 2025	% 2024(a)	% 2023(a)
Computed rate of tax(b)	24	25	25
Differences between computed rate of tax and effective tax rate due to:
Incentive tax credits	(2)	(2)	(2)
Withholding tax on dividends	2	3	2
Expenses not deductible for tax purposes	1	2	1
Irrecoverable withholding tax	1	1	1
Income tax reserve adjustments – current and prior year	–	–	(1)
Impact of disposals	3	1	(2)
Others	–	(1)	–
Effective tax rate	29	29	24

(a)The 2024 and 2023 comparatives have been restated from those previously published to reflect the demerger of our Ice Cream business (see note 21).

(b)The computed tax rate used is the average of the standard rate of tax applicable in the countries in which Unilever operates, weighted by the amount of profit before taxation generated in

each of those countries. For this reason, the rate may vary from year to year according to the mix of profit and related tax rates.

Our tax rate is reduced by incentive tax credits, the benefit from preferential tax regimes that have been legislated by the countries and provinces concerned in order

to promote economic development and investment. The tax rate is increased by business expenses that are not deductible for tax, such as entertainment costs and

some interest expense and by irrecoverable withholding taxes on dividends paid by subsidiary companies and on other cross-border payments, such as royalties and

service fees, which cannot be offset against other taxes due. The impact of disposals includes the tax on the Ice Cream business separation. Uncertain tax provisions

excluding the related interest amounted to €833 million (2024: €888 million). This includes €464 million (2024: €506 million) related to the Horlicks intangible

amortisation in India.

The Group’s future tax charge and effective tax rate could be affected by several factors, including changes in tax laws and their interpretation, the implementation of

the OECD Pillars 1 and 2, EU and US tax changes, as well as the impact of acquisitions, disposals and restructuring of our business.

Pillar 2 legislation continues to apply to the Group for 2025 and we have accrued Pillar 2 top-up taxes of €(21) million, which includes qualified domestic minimum

top-up taxes as well as amounts arising from the income inclusion rule in the UK.

6B. DEFERRED TAX

Deferred tax is recognised using the liability method on taxable temporary differences between the tax base and the accounting base of items included in the

balance sheet of the Group. Certain temporary differences are not provided for as follows:

■goodwill not deductible for tax purposes;

■the initial recognition of assets or liabilities that affect neither accounting nor taxable profit; and

■differences relating to investments in subsidiaries to the extent that it is probable that they will not reverse in the foreseeable future.

The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates

enacted, or substantively enacted, at the year end.

The Group has applied the exemption to not recognise or disclose any deferred tax related to Pillar 2 income taxes.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred

tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised.


Movements in 2025 and 2024	€ million As at 1 January 2025	€ million Income statement	€ million Other	€ million As at 31 December 2025	€ million As at 1 January 2024	€ million Income statement	€ million Other	€ million As at 31 December 2024
Pensions and similar obligations	(630)	(37)	(70)	(737)	(514)	(12)	(104)	(630)
Provisions and accruals	938	1	(67)	872	805	168	(35)	938
Goodwill and intangible assets	(3,863)	668	(194)	(3,389)	(3,697)	(45)	(121)	(3,863)
Accelerated tax depreciation	(584)	48	148	(388)	(572)	(20)	8	(584)
Tax losses	415	101	(37)	479	234	190	(9)	415
Fair value gains/losses	(54)	2	76	24	(17)	6	(43)	(54)
Share-based payments	273	(5)	(22)	246	246	(2)	29	273
Lease liability	181	13	(49)	145	189	(16)	8	181
Right of use asset	(161)	9	40	(112)	(166)	8	(3)	(161)
Other	423	73(a)	(93)(a)	403	610	(124)	(63)	423
	(3,062)	873	(268)	(2,457)	(2,882)	153(b)	(333)	(3,062)

(a)In 2025, movements relating to deferred tax include €23 million arising from discontinued operations, which has been included within ‘other' movements. For 2025, the other movement

column includes €302 million of net deferred tax assets transferred to Ice Cream on the demerger of our Ice Cream business.

(b)In 2024, movements relating to deferred tax include €(15) million arising from discontinued operations, which has been re‑presented in the income statement and note 6A to reflect the

demerger of our Ice Cream business.

6B. DEFERRED TAX continued

At the balance sheet date, the Group had unused tax losses of €2,241 million (2024: €2,245 million) and tax credits amounting to €813 million (2024: €795 million)

available for offset against future taxable profits. Deferred tax assets have not been recognised in respect of unused tax losses of €620 million (2024: €695 million)

and tax credits of €291 million (2024: €502 million), as it is not probable that there will be future taxable profits within the entities against which the losses and credits

can be utilised. Of these losses, €237 million (2024: €246 million) have expiry dates, being corporate income tax losses in the US, Korea, China and Mexico which

expire between now and 2038.

Where deferred tax assets have been recognised in respect of losses, the evidence considered includes the reason for the loss, potential planning strategies to utilise

the loss, including where permitted merger with other profitable entities and the availability of future taxable profits against which the losses can be utilised. Profit

forecasts used are consistent with those used in other areas of the business.

Deferred tax assets have not been recognised in respect of other deductible temporary differences of €1,187 million (2024: €986 million) as it is not expected they will

be utilised. Of these differences, €1,138 million (2024: €868 million) relates to limitation on the deduction of interest expenses. There is no expiry date for these

differences.

At the balance sheet date, the aggregate amount of temporary differences associated with undistributed earnings of subsidiaries for which deferred tax liabilities have

not been recognised was €1,764 million (2024: €2,013 million). No liability has been recognised in respect of these differences because the Group is in a position to

control the timing of the reversal of the temporary differences, and it is probable that such differences will not reverse in the foreseeable future.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred

income taxes relate to the same fiscal authority. The following amounts, determined after appropriate offsetting, are shown in the consolidated balance sheet:


Deferred tax assets and liabilities	€ million Assets 2025	€ million Assets 2024	€ million Liabilities 2025	€ million Liabilities 2024	€ million Total 2025	€ million Total 2024
Pensions and similar obligations	(194)	(158)	(543)	(472)	(737)	(630)
Provisions and accruals	413	510	459	428	872	938
Goodwill and intangible assets	211	286	(3,600)	(4,149)	(3,389)	(3,863)
Accelerated tax depreciation	29	(38)	(417)	(546)	(388)	(584)
Tax losses	455	395	24	20	479	415
Fair value gains/(losses)	6	(22)	18	(32)	24	(54)
Share-based payments	98	118	148	155	246	273
Lease liability	35	81	110	100	145	181
Right of use asset	(46)	(83)	(66)	(78)	(112)	(161)
Other	139	191	264	232	403	423
	1,146	1,280	(3,603)	(4,342)	(2,457)	(3,062)
Of which deferred tax to be recovered/(settled) after more than 12 months	873	879	(3,084)	(4,581)	(2,211)	(3,702)

6C. TAX ON ITEMS RECOGNISED IN EQUITY OR OTHER COMPREHENSIVE INCOME


Income tax is recognised in equity or other comprehensive income for items recognised directly in equity or other comprehensive income.

Tax effects directly recognised in equity or other comprehensive income were as follows:


Movements in 2025 and 2024	€ million Before tax 2025	€ million Tax (charge)/ credit 2025	€ million After tax 2025	€ million Before tax 2024(a)	€ million Tax (charge)/ credit 2024(a)	€ million After tax 2024(a)
Gains/(losses) on:
Equity instruments at fair value through other comprehensive income	(17)	3	(14)	60	—	60
Cash flow hedges	(166)	55	(111)	147	(25)	122
Remeasurement of defined benefit pension plans	219	(82)	137	271	(45)	226
Currency retranslation gains/(losses)	(2,312)	73	(2,239)	1,136	(23)	1,113
	(2,276)	49	(2,227)	1,614	(93)	1,521

(a)The 2024 comparatives have been restated from those previously published to reflect the demerger of our Ice Cream business (see note 21).