Logitech 2012 Annual Report Download - page 250

LOGITECH INTERNATIONAL S.A.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 6 — Income Taxes
The Company is incorporated in Switzerland but operates in various countries with differing tax laws and
rates. Further, a portion of the Company’s income before taxes and the provision for income taxes are generated
outside of Switzerland.
Income before income taxes for the fiscal years ended March 31, 2012, 2011 and 2010 is summarized as
follows (in thousands):
Year ended March 31,
2012 2011 2010
Income before income taxes:
Swiss ...................................................... $ (66,512) $ 50,219 $13,352
Non-Swiss .................................................. 157,789 98,229 70,271
Tot al .................................................... $ 91,277 $148,448 $83,623
The provision for income taxes is summarized as follows (in thousands):
Year ended March 31,
2012 2011 2010
Current:
Swiss ....................................................... $ 258 $ (1,073) $ 1,463
Non-Swiss ................................................... 25,187 26,218 22,279
Deferred:
Swiss ....................................................... (254) — —
Non-Swiss ................................................... (5,372) (5,157) (5,076)
Tot al ........................................................... $19,819 $19,988 $18,666
The difference between the provision for income taxes and the expected tax provision at the statutory income
tax rate is reconciled below (in thousands):
Year ended March 31,
2012 2011 2010
Expected tax provision at statutory income tax rates . . . . . . . . . . . . . . . . . . . . $ 7,759 $12,618 $ 7,108
Income taxes at different rates ...................................... 11,968 5,062 8,997
Research and development tax credits ................................ (1,666) (2,315) (1,628)
Unrealized investment income ...................................... — (315) (428)
Stock compensation .............................................. 2,696 1,965 2,189
Transaction costs ................................................ — — 1,257
Valuation allowance .............................................. (104) 2,309 —
Other .......................................................... (834) 664 1,171
Total provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $19,819 $19,988 $18,666
The Company negotiated a tax holiday on certain earnings in China which was effective from January 2006
through December 2010. The tax holiday was a tax exemption aimed to attract foreign technological investment in
China. The tax holiday decreased income tax expense by approximately $3.6 million, and $2.4 million for fiscal
years 2011 and 2010.
240