MORGAN STANLEY

21. Income Taxes

Components of Provision for Income Taxes

1. In 2024, India was presented separately for the first time. The prior period amounts for Other have been disaggregated to exclude India to align with the current presentation.

2. In 2023, Brazil was presented separately for the first time. The prior period amounts for Other have been disaggregated to exclude Brazil to align with the current presentation.

3. Other Non-U.S. tax provisions for 2024, 2023 and 2022 primarily include Germany, Hong Kong and Singapore.

Reconciliation of the U.S. Federal Statutory Income Tax Rate to the Effective Income Tax Rate

1. In 2023, Non-taxable income was presented separately for the first time. The prior period amounts for Non-U.S. earnings and Other have been disaggregated to exclude Non-taxable income to align with the current presentation.

Table of Contents

Notes to Consolidated Financial Statements

Deferred Tax Assets and Liabilities

Deferred income taxes reflect the net tax effects of temporary differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when such differences are expected to reverse.

The Firm believes the recognized net deferred tax assets (after valuation allowance) at December 31, 2024 are more likely than not to be realized based on expectations as to future taxable income in the jurisdictions in which it operates.

The earnings of certain foreign subsidiaries and affiliates are indefinitely reinvested due to regulatory and other capital requirements in foreign jurisdictions. As of December 31, 2024 and December 31, 2023, the unrecognized deferred tax liability attributable to indefinitely reinvested earnings is $405 million and $302 million, respectively.

Rollforward of Unrecognized Tax Benefits

1. Represent ending unrecognized tax benefits adjusted for the impact of the federal benefit of state issues, competent authority arrangements and foreign tax credit offsets. If recognized, these net benefits would favorably impact the effective tax rate in future periods.

It is reasonably possible that significant changes in the balance of unrecognized tax benefits may occur within the next 12 months. At this time, however, it is not possible to reasonably estimate the expected change to the total amount of unrecognized tax benefits and the impact on the Firm’s effective tax rate over the next 12 months.

Interest Expense (Benefit) and Penalties Associated with Unrecognized Tax Benefits, Net of Federal and State Income Tax Benefits

Interest and penalties related to unrecognized tax benefits are recognized as a component of the provision for income taxes.

Earliest Tax Year Subject to Examination in Major Tax Jurisdictions

The Firm is routinely under examination by the IRS and other tax authorities in certain countries, such as Japan and the U.K., and in states and localities in which it has significant business operations, such as New York.

The Firm believes that the resolution of these tax examinations will not have a material effect on the annual financial statements, although a resolution could have a material impact in the income statement and on the effective tax rate for any period in which such resolutions occur.