Vistaprint 2015 Annual Report Download - page 91

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83
The components of the provision (benefit) for income taxes are as follows:
Year Ended June 30,
2015 2014 2013
Current:
U.S. Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 12,680 $ 10,438 $ 6,816
U.S. State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,313 3,880 1,762
Non-U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,496 8,273 3,477
Total current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,489 22,591 12,055
Deferred:
U.S. Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,505) (3,754) (274)
U.S. State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,070) (897) (163)
Non-U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (11,473) (7,350) (2,231)
Total deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (17,048) (12,001) (2,668)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 10,441 $ 10,590 $ 9,387
The following is a reconciliation of the standard U.S. federal statutory tax rate and our effective tax rate:
Year Ended June 30,
2015 2014 2013
U.S. federal statutory income tax rate . . . . . . . . . . . . . . . . . . . . . . . . . 35.0% 35.0% 35.0%
State taxes, net of federal effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.8 3.4 2.6
Tax rate differential on non-U.S. earnings. . . . . . . . . . . . . . . . . . . . . . (24.0) (19.3) (23.8)
Compensation related items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1 4.3 6.5
Increase in valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.0 4.8 5.0
Nondeductible (taxable) acquisition-related payments . . . . . . . . . . . . 3.7 0.3 (0.3)
Notional interest deduction (Italy) . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2.5) (0.1) —
Net tax (benefit) expense on intellectual property transfer . . . . . . . . . (12.2) (16.4) 3.2
Tax benefit from Canadian tax currency election . . . . . . . . . . . . . . . . — — (4.7)
Nondeductible loss on investment in Namex . . . . . . . . . . . . . . . . . . . —3.8 —
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.6 2.9 (0.5)
Effective income tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.5% 18.7% 23.0%
For the year ended June 30, 2015, our effective tax rate is 10.5% as compared to the prior year effective
tax rate of 18.7%. The main causes for this decrease are higher tax benefits in fiscal 2015 related to the transfer of
intellectual property described in further detail below, combined with an increase in our consolidated pre-tax income
and a more favorable geographical mix of earnings as compared to fiscal 2014. These benefits to the fiscal 2015
tax rate were partially offset by greater losses incurred in fiscal 2015 as compared to fiscal 2014 in certain
jurisdictions where we are unable to recognize a tax benefit. For the year ended June 30, 2014, we recognized a
loss on our investment in Namex for which there was no tax benefit and this adversely impacted the effective tax
rate for fiscal 2014.
On October 1, 2013, we made changes to our corporate entity operating structure, including transferring
our intellectual property among certain of our subsidiaries, primarily to align our corporate entities with our evolving
operations and business model. The transfer of assets occurred between wholly owned legal entities within the
Cimpress group that are based in different tax jurisdictions. As the impact of the transfer was the result of an intra-
entity transaction, any resulting gain or loss and immediate tax impact on the transfer is eliminated and not
recognized in the consolidated financial statements under U.S. GAAP. The transferor entity recognized a gain on
the transfer of assets that was not subject to income tax in its local jurisdiction. However, the recipient entity will
receive a tax benefit associated with the future amortization of the fair market value of the intellectual property
received, which for tax purposes will occur over a period of five years in accordance with the applicable tax laws.
Form 10-K