TripAdvisor 2015 Annual Report Download - page 90
Download and view the complete annual report
Please find page 90 of the 2015 TripAdvisor annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.
Areconciliationoftheprovisionforincometaxestotheamountscomputedbyapplyingthestatutoryfederalincometaxratetoincomebeforeincometaxes
isasfollows:
Year Ended December 31,
2015 2014 2013
(in millions)
Incometaxexpenseatthefederalstatutoryrateof35% $ 84 $ 113 $ 100
Foreignratedifferential (53) (49) (41)
Stateincometaxes,netofeffectoffederaltaxbenefit 4 13 8
Unrecognizedtaxbenefitsandrelatedinterest 12 14 9
Changeincost-sharingtreatmentofstock-basedcompensation (13) - -
Non-deductibletransactioncosts 1 1 -
Changeinvaluationallowance 5 5 2
Other,net 1 (1) 1
Provisionforincometaxes $ 41 $ 96 $ 79
During2011,theSingaporeEconomicDevelopmentBoardacceptedourapplicationtoreceiveataxincentiveundertheInternationalHeadquarters
Award.Thisincentiveprovidesforareducedtaxrateonqualifyingincomeof5%ascomparedtoSingapore’sstatutorytaxrateof17%andisconditionaluponour
meetingcertainemploymentandinvestmentthresholds.ThisagreementhasbeenextendeduntilJune30,2021aswehavemetcertainemploymentandinvestment
thresholds.Thisbenefitresultedinadecreasetothe2015taxprovisionof$4millionoraddedanincremental$0.03toourDilutedEPSfor2015.
ByvirtueofpreviouslyfiledconsolidatedincometaxreturnsfiledwithExpedia,wearecurrentlyunderanIRSauditforthe2009and2010taxyears,and
havevariousongoingstateincometaxaudits.WeareseparatelyunderexaminationbytheIRSforthe2012and2013taxyearsandhavecommencedan
employmenttaxauditwiththeIRSforthe2013and2014taxyears.Theseauditsincludequestioningofthetimingandtheamountofincomeanddeductionsand
theallocationofincomeamongvarioustaxjurisdictions.Theseexaminationsmayleadtoproposedorordinarycourseadjustmentstoourtaxes.Wearenolonger
subjecttotaxexaminationsbytaxauthoritiesforyearspriorto2007.AsofDecember31,2015,nomaterialassessmentshaveresulted.
DuringtheyearendedDecember31,2015,wereceivednotificationofadraftproposedadjustmentfromtheIRSforthe2009and2010taxyearsandwe
anticipatereceivingadditionalnoticesofproposedadjustmentsforthesameyears.Theseproposedadjustmentsarerelatedtotransferpricingwithourforeign
subsidiaries,andwouldresultinanincreasetoU.S.taxableincomeandfederaltaxexpensefor2009and2010,subjecttointerest.Ourpolicyistoreviewand
updatetaxreservesasfactsandcircumstanceschange.Basedonourinterpretationoftheregulationsandavailablecaselaw,webelievethepositionwehavetaken
withregardtotransferpricingwithourforeignsubsidiariesissustainable.WeintendtodefendourpositionthroughIRSadministrativeand,ifnecessary,by
judicialremedies.AsofDecember31,2015,noadditionaladjustmentshavebeenproposed.
InJuly2015,theUnitedStatesTaxCourt(the“Court”)issuedanopinionfavorabletoAlteraCorporation(“Altera”)withrespecttoAltera’slitigationwith
theInternalRevenueService(“IRS”).ThisopinionwassubmittedasafinaldecisionunderTaxCourt(“T.C.”)Rule155duringDecember2015.Thelitigation
relatestothetreatmentofstock-basedcompensationexpenseinaninter-companycost-sharingarrangementwithAltera’sforeignsubsidiary.Initsopinion,the
CourtacceptedAltera’spositionofexcludingstockbasedcompensationfromitsinter-companycost-sharingarrangement.TheIRShastherighttoappealthe
Courtdecision.Atthistime,theU.S.DepartmentoftheTreasuryhasnotwithdrawntherequirementfromitsregulationstoincludestock-basedcompensationin
intercompanycost-sharingarrangements.TheCompanyhasevaluatedtheimpactofthecourtcaseandrecordedataxbenefitof$13millioninitsconsolidated
statementofoperationsfortheyearendedDecember31,2015.TheCompanywillcontinuetomonitorthismatterandrelatedpotentialimpactstoitsconsolidated
financialstatements.
87