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INCOME TAXES | 12 Months Ended
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Dec. 31, 2015
INCOME TAXES |
INCOME TAXES | 14. INCOME TAXES Bunge operates globally and is subject to the tax laws and regulations of numerous tax jurisdictions and authorities, as well as tax agreements and treaties among these jurisdictions. Bunge's tax provision is impacted by, among other factors, changes in tax laws, regulations, agreements and treaties, currency exchange rates and Bunge's profitability in each taxing jurisdiction. Bunge has elected to use the U.S. federal income tax rate to reconcile the actual provision for income taxes. The components of income from operations before income tax are as follows:
|  | Year Ended December 31, |
(US$ in millions) |  | 2015 |  | 2014 |  | 2013 |
United States |  | $ | 207 |  | $ | 315 |  | $ | 179 |
Non-United States |  |  | 844 |  |  | 419 |  |  | 835 |
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Total |  | $ | 1,051 |  | $ | 734 |  | $ | 1,014 |
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The components of the income tax (expense) benefit are:
|  | Year Ended December 31, |
(US$ in millions) |  | 2015 |  | 2014 |  | 2013 |
Current:(1) |  |  |  |  |  |  |  |  |  |
United States |  | $ | (35 | ) | $ | (93 | ) | $ | (33 | )
Non-United States |  |  | (245 | ) |  | (246 | ) |  | (411 | )
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
|  |  | (280 | ) |  | (339 | ) |  | (444 | )
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Deferred: |  |  |  |  |  |  |  |  |  |
United States |  |  | (36 | ) |  | (20 | ) |  | (18 | )
Non-United States |  |  | 20 |  |  | 110 |  |  | (442 | )
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|  |  | (16 | ) |  | 90 |  |  | (460 | )
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Total |  | $ | (296 | ) | $ | (249 | ) | $ | (904 | )
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(1)Included in current income tax expense are $14 million, $(6) million, and $32 million related to uncertain tax benefits for the years ended December 31, 2015, 2014 and 2013, respectively. Reconciliation of the income tax (expense) benefit if computed at the U.S. Federal income tax rate to Bunge's reported income tax benefit (expense) is as follows:
|  | Year Ended December 31, |
(US$ in millions) |  | 2015 |  | 2014 |  | 2013 |
Income from operations before income tax |  | $ | 1,051 |  | $ | 734 |  | $ | 1,014 |
Income tax rate |  |  | 35 | % |  | 35 | % |  | 35 | %
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Income tax expense at the U.S. Federal tax rate |  |  | (368 | ) |  | (257 | ) |  | (355 | )
Adjustments to derive effective tax rate: |  |  |  |  |  |  |  |  |  |
Foreign earnings taxed at different statutory rates |  |  | 16 |  |  | 37 |  |  | 30 |
Valuation allowances |  |  | (44 | ) |  | (112 | ) |  | (642 | )
Fiscal incentives(1) |  |  | 41 |  |  | 41 |  |  | 48 |
Foreign exchange on monetary items |  |  | 5 |  |  | 24 |  |  | (13 | )
Tax rate changes |  |  | (1 | ) |  | (4 | ) |  | (5 | )
Non-deductible expenses |  |  | (16 | ) |  | (38 | ) |  | (44 | )
Uncertain tax positions |  |  | 14 |  |  | (6 | ) |  | (32 | )
Deferred balance adjustments |  |  | 8 |  |  | (25 | ) |  | (52 | )
Equity distributions |  |  | 64 |  |  | 32 |  |  | 60 |
Foreign income taxed in Brazil |  |  | — |  |  | 93 |  |  | 136 |
Other |  |  | (15 | ) |  | (34 | ) |  | (35 | )
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Income tax benefit (expense) |  | $ | (296 | ) | $ | (249 | ) | $ | (904 | )
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(1)Fiscal incentives predominantly relate to investment incentives in Brazil that are exempt from Brazilian income tax. The primary components of the deferred tax assets and liabilities and the related valuation allowances are as follows:
|  | December 31, |
(US$ in millions) |  | 2015 |  | 2014 |
Deferred income tax assets: |  |  |  |  |  |  |
Net operating loss carryforwards |  | $ | 923 |  | $ | 1,125 |
Property, plant and equipment |  |  | 181 |  |  | 250 |
Employee benefits |  |  | 89 |  |  | 100 |
Tax credit carryforwards |  |  | 8 |  |  | 9 |
Inventories |  |  | 23 |  |  | 34 |
Intangibles |  |  | 106 |  |  | 153 |
Accrued expenses and other |  |  | 595 |  |  | 629 |
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Total deferred income tax assets |  |  | 1,925 |  |  | 2,300 |
Less valuation allowances |  |  | (798 | ) |  | (1,078 | )
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Deferred income tax assets, net of valuation allowance |  |  | 1,127 |  |  | 1,222 |
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Deferred income tax liabilities: |  |  |  |  |  |  |
Property, plant and equipment |  |  | 392 |  |  | 409 |
Undistributed earnings of affiliates not considered permanently reinvested |  |  | 11 |  |  | 10 |
Intangibles |  |  | 86 |  |  | 112 |
Investments |  |  | 38 |  |  | 40 |
Inventories |  |  | 27 |  |  | 27 |
Accrued expenses and other |  |  | 217 |  |  | 101 |
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Total deferred income tax liabilities |  |  | 771 |  |  | 699 |
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Net deferred income tax assets |  | $ | 356 |  | $ | 523 |
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Deferred income tax assets and liabilities are measured using the enacted tax rates expected to apply to the years in which those temporary differences are expected to be recovered or settled. With respect to its unremitted earnings that are not considered to be indefinitely reinvested, Bunge has provided a deferred tax liability totaling $11 million and $10 million as of December 31, 2015 and 2014, respectively. As of December 31, 2015, Bunge has determined it has unremitted earnings that are considered to be indefinitely reinvested of approximately $902 million and, accordingly, no provision for income taxes has been made. If these earnings were distributed in the form of dividends or otherwise, Bunge would be subject to income taxes either in the form of withholding taxes or income taxes to the recipient; however, it is not practicable to estimate the amount of taxes that would be payable upon remittance of these earnings. At December 31, 2015, Bunge's pre-tax loss carryforwards totaled $3,235 million, of which $2,269 million have no expiration, including loss carryforwards of $1,472 million in Brazil. While loss carryforwards in Brazil can be carried forward indefinitely, annual utilization is limited to 30% of taxable income calculated on an entity by entity basis as Brazil tax law does not provide for a consolidated return concept. As a result, realization of these carryforwards may take in excess of five years. The remaining tax loss carryforwards expire at various periods beginning in 2015 through the year 2030. Income Tax Valuation Allowances—Bunge records valuation allowances when current evidence does not suggest that some portion or all of its deferred tax assets will be realized. The ultimate realization of deferred tax assets depends primarily on Bunge's ability to generate sufficient timely future income of the appropriate character in the appropriate taxing jurisdiction. As of December 31, 2015 and 2014, Bunge has recorded valuation allowances of $798 million and $1,078 million, respectively. The net decrease of $280 million results primarily from cumulative translation adjustments for Brazil and other business operations. Uncertain Tax Positions—ASC Topic 740 requires applying a "more likely than not" threshold to the recognition and de-recognition of tax benefits. Accordingly Bunge recognizes the amount of tax benefit that has a greater than 50 percent likelihood of being ultimately realized upon settlement. At December 31, 2015 and 2014, respectively, Bunge had recorded uncertain tax positions of $63 million and $81 million in other non-current liabilities and $1 million and $2 million in current liabilities in its consolidated balance sheets. During 2015, 2014 and 2013, respectively, Bunge recognized $1 million, $16 million and $10 million of interest and penalty charges in income tax (expense) benefit in the consolidated statements of income. At December 31, 2015 and 2014, respectively, Bunge had included accrued interest and penalties of $26 million and $26 million within the related tax liability line in the consolidated balance sheets. A reconciliation of the beginning and ending amount of unrecognized tax benefits follows:
(US$ in millions) |  | 2015 |  | 2014 |  | 2013 |
Balance at January 1, |  | $ | 72 |  | $ | 151 |  | $ | 104 |
Additions based on tax positions related to the current year |  |  | 6 |  |  | 9 |  |  | 5 |
Additions based on acquisitions |  |  | 10 |  |  | — |  |  | 17 |
Additions based on tax positions related to prior years |  |  | 1 |  |  | 16 |  |  | 48 |
Reductions for tax positions of prior years |  |  | (14 | ) |  | (12 | ) |  | (1 | )
Settlement or clarification from tax authorities |  |  | (6 | ) |  | (79 | ) |  | — |
Expiration of statute of limitations |  |  | (5 | ) |  | (1 | ) |  | (21 | )
Foreign currency translation |  |  | (13 | ) |  | (12 | ) |  | (1 | )
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Balance at December 31, |  | $ | 51 |  | $ | 72 |  | $ | 151 |
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Substantially all of the unrecognized tax benefits balance, if recognized, would affect Bunge's effective income tax rate. Bunge believes that it is reasonably possible that approximately $10 million of its unrecognized tax benefits may be recognized by the end of 2015 as a result of a lapse of the statute of limitations or settlement with the tax authorities. Bunge, through its subsidiaries, files income tax returns in the United States (federal and various states) and non-United States jurisdictions. The table below reflects the tax years for which Bunge is subject to income tax examinations by tax authorities:
|  | Open Tax Years
North America |  | 2009 - 2015
South America |  | 2009 - 2015
Europe |  | 2006 - 2015
Asia-Pacific |  | 2003 - 2015
As of December 31, 2015, Bunge's Brazilian subsidiaries have received income tax assessments relating to 2008 through 2012 of approximately 3,494 million Brazilian reais (approximately $895 million), plus applicable interest on the outstanding amount. Bunge has recorded unrecognized tax benefits related to these tax assessments of 23 million Brazilian reais (approximately $6 million) as of December 31, 2015. In addition, as of December 31, 2015, Bunge's Argentine subsidiary had received income tax assessments relating to 2006 through 2009 of approximately 1,381 million Argentine pesos (approximately $105 million), plus applicable interest on the outstanding amount due of approximately 3,089 million Argentine pesos (approximately $237 million). Bunge anticipates that the tax authorities will examine fiscal years 2010-2013, although no notice has been rendered to Bunge's Argentine subsidiary. Management, in consultation with external legal advisors, believes that it is more likely than not that Bunge will prevail on the proposed assessments (with exception of unrecognized tax benefit discussed above) in Brazil and Argentina and intends to vigorously defend its position against these assessments. Bunge made cash income tax payments, net of refunds received, of $271 million, $303 million and $156 million during the years ended December 31, 2015, 2014 and 2013, respectively.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 + Details
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