MAMastercard

The effective income tax rates for the years ended December 31, 2025 and 2024 were 19.4% and 2023 were 15.6% and 17.9%, 15.6%, respectively. The adjusted effective income tax rates for the years ended December 31, 2025 and 2024 were 19.6% and 2023 were 16.2% and 18.5%, 16.2%, respectively. Both the as-reported and as-adjusted effective income tax rates were lower in higher versus 2024, primarily due to a discrete tax expense in 2023 related to changes change in the valuation allowance associated with net tax effect of our Singapore operations, which includes the U.S. foreign tax credits deferred tax asset. In 2023, the treatment of foreign taxes paid under the U.S. tax regulations published Pillar 2 Rules that took effect in 2022 changed due to the foreign tax legislation enacted in Brazil and Notice 2023-55 (the “Notice”) released by the U.S. Department of Treasury. Therefore, we recognized a total $327 million discrete tax expense in 2023 to establish the valuation allowance. This discrete tax expense was partially offset by our ability to claim more U.S. foreign tax credits generated in 2022 and 2023 due to the Notice. 2025. Additionally, a change in our geographic mix of earnings in 2024 contributed to the lower higher effective income tax rates compared to the prior year. rates, partially offset by net discrete tax benefits.

As of December 31, 2024, Mastercard Foundation owned owns shares of our Class A common stock representing approximately 9.4% greater than 5% of our general voting power. Historically, Mastercard Foundation had been restricted from selling or otherwise transferring its shares of Class A common stock prior to May 1, 2027, except to the extent necessary to satisfy its charitable disbursement requirements, for which purpose earlier sales were permitted and had occurred. In July 2023, pursuant to an application in consultation with Mastercard, Mastercard Foundation received court approval to advance that date to January 1, 2024. As a result, Mastercard Foundation is now permitted to sell all or part of its remaining shares, subject to certain conditions. In March 2024, Mastercard Foundation began selling shares pursuant to an orderly and structured plan to diversify its Mastercard shares over a seven-year period, while committing to remain a long-term Mastercard stockholder and retaining a significant holding of Mastercard shares in its portfolio. The directors of Mastercard Foundation are required to be independent of us and our customers. The ownership of Class A common stock by Mastercard Foundation, together with the seven-year diversification plan, could discourage or make more difficult acquisition proposals favored by other holders of the Class A common stock. In addition, because Mastercard Foundation intends to sell its shares over an extended period of time, it may not have the same interest in short or medium-term movements in our stock price as, or incentive to approve a corporate action that may be favorable to, our other stockholders.

Targeted Improvements to Income Tax Disclosures the Accounting for Internal-Use Software - In December 2023, September 2025, the Financial Accounting Standards Board (“FASB”) FASB issued accounting guidance to enhance modernize the transparency accounting for internal-use software costs by eliminating the consideration of project development stages and decision usefulness of income tax disclosures. The guidance includes improvements to income tax disclosures primarily related to clarifying the rate reconciliation and income taxes paid. criteria for capitalization. This guidance is effective for annual periods fiscal years beginning after December 15, 2024, with early adoption permitted. 2027, including interim periods. The Company is in the process of evaluating when it will adopt and assessing the impact of this guidance in on its Form 10-K for the year ended December 31, 2025. financial statements.