Vistaprint 2006 Annual Report Download - page 82

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Table of Contents VISTAPRINT LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Years Ended June 30, 2006, 2005 and 2004
(in thousands, except share and per share data)
11. Employees’ Savings Plan
The Company has a defined contribution retirement plan that complies with Section 401(k) of the Internal Revenue Code. Substantially all
employees in the U.S. are eligible to participate in the plan. Under the provisions of the plan, employees may voluntarily contribute up to 15% of
eligible compensation, subject to IRS limitations. The Company matches 50% of each participant’s voluntary contributions, subject to a maximum
Company contribution of 3% of the participant’s eligible compensation. Employee contributions are fully vested when contributed. Company
matching contributions vest over four years. The Company contributed and expensed $396, $253 and $256 in the years ended June 30, 2006,
2005 and 2004, respectively.
12. Income Taxes
In April 2006, the United States Internal Revenue Service completed its audit of the Company’s United States subsidiary, VistaPrint USA,
Incorporated, for the fiscal year ending June 30, 2003. The Company had established tax reserves in excess of the ultimate settled amounts and
as a result of the settlement the Company reversed $252 of excess income tax reserves in March 2006. In addition, in May 2006 the Company
reversed excess income tax reserves of $686 related to the expiration of a tax audit statute of limitations relating to a prior fiscal year. These
reversals were accounted for as discrete events in the respective quarters and resulted in an income tax benefit of $938.
The components of the (benefit) provision for income taxes are as follows:
Year Ended June 30,
2006 2005 2004
Current:
U.S. Federal $(163) $ 265 $ 258
U.S. State 6 — —
Non−U.S. 722 239 119
Total current 565 504 377
Deferred:
U.S. Federal 218 (420) (527)
Total $ 783 $ 84 $(150)
The following is a reconciliation of the standard U.S. statutory tax rate and the Company’s effective tax rate:
Year Ended June 30,
2006 2005 2004
U.S. federal statutory income tax rate 34.0% (34.0)% 34.0%
Tax reserve reversal (4.7)% — —
Valuation allowance utilized — (5.4)% (18.2)%
Foreign rate differential (26.6)% 40.4% (18.1)%
Other 1.2% (0.5)% (2.3)%
Effective income tax rate 3.9% (0.5)% (4.6)%
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