Dow Chemical 2012 Annual Report Download - page 159
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133
Tax years that remain subject to examination for the Company’s major tax jurisdictions are shown below:
Tax Years Subject to Examination by Major Tax
Jurisdiction at December 31
Earliest Open Year
Jurisdiction 2012 2011
Argentina 2006 2005
Brazil 2008 2007
Canada 2008 2008
France 2010 2009
Germany 2006 2002
Italy 2003 2003
The Netherlands 2012 2011
Spain 2008 2008
Switzerland 2009 2009
United Kingdom 2008 2008
United States:
Federal income tax 2004 2004
State and local income tax 2004 2004
The Company is currently under examination in a number of tax jurisdictions. It is reasonably possible that these
examinations may be resolved within twelve months. As a result, it is reasonably possible that the total gross unrecognized tax
benefits of the Company at December 31, 2012 may be reduced in the next twelve months by approximately $45 million to
$90 million as a result of these resolved examinations. The impact on the Company’s results of operations is not expected to be
material.
The reserve for non-income tax contingencies related to issues in the United States and foreign locations was $151 million
at December 31, 2012 and $134 million at December 31, 2011. This is management’s best estimate of the potential liability for
non-income tax contingencies. Inherent uncertainties exist in estimates of tax contingencies due to changes in tax law, both
legislated and concluded through the various jurisdictions’ tax court systems. It is the opinion of the Company’s management
that the possibility is remote that costs in excess of those accrued will have a material impact on the Company’s consolidated
financial statements.
Subsequent Event
On January 2, 2013, President Obama signed into law the “American Taxpayer Relief Act of 2012.” This law extends
retroactively to 2012 and prospectively through 2013 certain temporary business tax provisions (“extenders”) that are beneficial
to Dow including the research and experimentation tax credit, the controlled foreign corporation look-through rule, bonus
depreciation, and various incentives for energy efficient homes and buildings. As this tax law was enacted on January 2, 2013,
the retroactive impact for 2012 will be recognized in the first quarter of 2013 tax provision. The Company estimates the
extenders will have an immaterial impact on the tax provision.