Shopify discloses cash taxes without country detail

Shopify’s 10K annual report for 2025 includes expanded income tax disclosures following new reporting requirements. The company presents total cash income taxes paid and separates domestic and foreign income and tax expense.

However, it does not disclose a country-by-country breakdown of cash taxes paid. It reports aggregate cash taxes and separates domestic and foreign income and tax expense.

Country-level tax picture

The filing discloses total cash paid for income taxes and splits income and tax expense between domestic and foreign categories. It does not identify specific countries where cash taxes were paid.

Cash paid for income taxes, net:

• 2025: $194 million

• 2024: $116 million

• 2023: $50 million

Income before income taxes was split as follows:

• 2025 domestic income: $450 million

• 2025 foreign income: $1,059 million

• 2024 domestic income: $537 million

• 2024 foreign income: $1,691 million

Current income tax expense in 2025 totaled $292 million, composed of:

• Federal: $35 million

• Provincial: $64 million

• Foreign: $193 million

The company does not disclose which foreign jurisdictions generated the $193 million of current foreign tax expense or the related cash payments.

Concentration and scale

The geographic pattern is visible only at a high level. In 2025, roughly 70% of pre-tax income was earned outside the domestic category. Foreign current tax expense represented about two-thirds of total current tax expense for the year.

Cash taxes rose to $194 million in 2025, compared with $116 million in 2024. The $78 million increase reflects higher overall cash outflows, but the filing does not attribute it to specific countries.

The structure suggests that Shopify’s tax payments are more concentrated in foreign jurisdictions than in the domestic category, based on both income mix and current tax expense. The absence of named countries limits visibility into how dispersed or concentrated those foreign payments are.

Year-over-year change

Income before income taxes declined from $2,228 million in 2024 to $1,509 million in 2025. The provision for income taxes increased from $209 million to $278 million over the same period.

The effective tax rate increased from approximately 9.4% in 2024 to about 18.4% in 2025. Cash taxes also increased by $78 million year over year.

The mix of domestic and foreign income shifted. Foreign income fell from $1,691 million in 2024 to $1,059 million in 2025. Domestic income declined more modestly, from $537 million to $450 million. Despite lower total pre-tax income, the provision for income taxes rose.

The filing does not add or remove named jurisdictions year over year, because no individual countries are disclosed.

What the numbers suggest

The numbers show a business that generates most of its pre-tax income outside the domestic category and incurs most of its current tax expense abroad. The increase in the effective tax rate in 2025 occurred alongside lower total pre-tax income. Cash taxes nearly doubled from 2023 to 2024 and increased again in 2025.

Visibility remains limited. The company separates domestic and foreign operations but does not identify specific countries in which cash taxes are paid. That leaves open the question of whether payments are concentrated in a small number of jurisdictions or spread across many markets.

The filing does not identify any specific legislative change, regulatory action, or other non-routine external event that drove the year-over-year increase in the effective tax rate. It does not cite tax law changes, new minimum taxes, or discrete policy shifts as drivers of the 2025 rate. In the absence of such disclosure, the increase appears in the numbers without an explicit external trigger.

Closing takeaway

Shopify reports rising cash income tax payments and a higher effective tax rate in 2025, with most income and current tax expense categorized as foreign. The filing increases aggregate transparency but stops short of naming the countries where those taxes are paid.