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Income taxes
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
Income taxes

Note 36.      Income taxes

 

The components of income before income taxes are as follows:

           
Income / (Loss) 12 months ended December 31,
USD'000 2022   2021   2020
Switzerland                          16,314                          (14,756)                          (22,277)
Foreign                          (3,269)                            (8,703)                            (6,621)
Income/(loss) before income tax from continuing operations                        (13,045)                          (23,459)                          (28,898)

 

 

Income taxes relating to the Group are broken down as follows:

           
Income taxes 12 months ended December 31,
USD'000 2022   2021   2020
Switzerland                                    -                                      -                                      -
Foreign                            3,238                                 (13)                                   (9)
Income tax income / (expense) from continuing operations                            3,238                                 (13)                                   (9)

 

 

The difference between the income tax recovery (expense) at the Swiss statutory rate compared to the Group’s income tax recovery (expense) as reported is reconciled below:

           
  12 months ended December 31,
USD'000 2022   2021   2020
Net income/(loss) from continuing operations before income tax                        (13,045)                          (23,459)                          (28,898)
Statutory tax rate 14%   14%   14%
Expected income tax (expense)/recovery                            1,825                              3,282                              4,043
Change in valuation allowance                          (3,129)                            (2,849)                               (631)
Change in tax loss carryforwards                            5,760                               (341)                            (3,411)
Add back loss carryforwards used for the debt remission by WISeKey Semiconductors SAS                            1,342                                      -                                      -
Permanent Difference                          (2,560)                               (105)                                 (10)
Income tax (expense) / recovery from continuing operations                            3,238                                 (13)                                   (9)

 

The Group assesses the recoverability of its deferred tax assets and, to the extent recoverability does not satisfy the “more likely than not” recognition criterion under ASC 740, records a valuation allowance against its deferred tax assets. The Group considered its recent operating results and anticipated future taxable income in assessing the need for its valuation allowance.

 

The Group’s deferred tax assets and liabilities consist of the following:

 

Deferred income tax assets/(liabilities) As at December 31,   As at December 31,
USD'000 2022   2021
Switzerland                                    -                                      -
Foreign                            3,295                                     1
Deferred income tax assets/(liabilities)                            3,295                                     1

 

Deferred tax assets and liabilities As at December 31,   As at December 31,
USD'000 2022   2021
Stock-based compensation -   92
Defined benefit accrual 161   748
Tax loss carry-forwards 20,759   14,999
Add back loss carryforwards used for the debt remission by WISeKey Semiconductors SAS 1,342   -
Valuation allowance (18,967)   (15,838)
Deferred tax assets / (liabilities) 3,295   1

 

 

As of December 31, 2022, the Group’s operating cumulated loss carry-forwards of all jurisdictions for its continuing operations are as follows:

Gibraltar

Operating loss-carryforward as of December 31, 2022        
USD'000 USA Switzerland Spain France UK India Vietnam Saudi Arabia Gibraltar Total
2023 - 9,710 197 14,396 28 - - 24 4 24,359
2024 - 5,594 1,144 - 2 - - 39 - 6,779
2025 - 10,248 1,173 - 1 78 - - - 11,500
2026 - 6,048 - - 1 312 - - - 6,361
2027 - 20,921 - - 2 240 3 - - 21,166
2028 - 25,803 - - 1 146 - - - 25,950
2029 - 51,751 - - - 72 - - - 51,823
2030 - - - - - 54 - - - 54
2031 - - 22 - - 29 - - - 51
2032 21 - 22 - - - - - - 43
2033 - - 66 - - - - - - 66
2034 - - 76 - - - - - - 76
2035 247 - 86 - - - - - - 333
2036 - - 176 - - - - - - 176
2037 159 - 98 - - - - - - 257
2038 - - 155 - - - - - - 155
2039 220 - 165 - - - - - - 385
2040 90 - - - - - - - - 90
2041 - - - - - - - - - -
2042 45 - - - - - - - - 45
Total operating loss carry-forwards / Year of expiration if applicable to jurisdiction
  782 130,075 3,380 14,396 35 931 3 63 4 149,669

 

The following tax years remain subject to examination:

 

Significant jurisdictions Open years
Switzerland 2017 - 2022
USA 2021 - 2022
France 2020 - 2022
Spain 2018 - 2022
Japan 2022
Taiwan 2022
India 2022
Germany 2021 - 2022
UK 2017 - 2022
Arabia 2022
Vietnam 2022
Gibraltar 2022

 

As at December 31, 2022, WISeKey Semiconductors SAS had recorded a USD 39,901 tax provision following a tax audit started in 2018 in relation to prior years. Although the final conclusions have not yet been communicated formally, management believes that it is more probable than not that the entity will have to pay additional taxes and has calculated the provision based on preliminary discussions with the tax authorities.

 

The Group has no unrecognized tax benefits.