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Income Tax | 12 Months Ended
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Dec. 31, 2011
Income Tax [Abstract] |
Income Tax |
11. | Income Tax
The components of the provision for income taxes were as follows:
|  | Year Ended December 31, 2011 $ |  |  | Year Ended December 31, 2010 $ |  |  | Year Ended December 31, 2009 $ |
Current |  |  | 2,297 |  |  |  | 1,340 |  |  |  | 500 |
Deferred |  |  | (1,516 | ) |  |  | 330 |  |  |  | 194 |
Income tax expense |  |  | 781 |  |  |  | 1,670 |  |  |  | 694 |
The Partnership operates in countries that have differing tax laws and rates. Consequently, a consolidated weighted average tax rate will vary from year to year according to the source of earnings or losses by country and the change in applicable tax rates. Reconciliations of the tax charge related to the relevant year at the applicable statutory income tax rates and the actual tax charge related to the relevant year are as follows:
|  | Year Ended December 31, 2011 $ |  |  | Year Ended December 31, 2010 $ |  |  | Year Ended December 31, 2009 $ |
Net income before income tax expenses |  |  | 98,137 |  |  |  | 94,614 |  |  |  | 82,631 |
Net (income) loss not subject to taxes |  |  | (205,363 | ) |  |  | (138,951 | ) |  |  | 7,563 |
Net (loss) income subject to taxes |  |  | (107,226 | ) |  |  | (44,337 | ) |  |  | 90,194 |
At applicable statutory tax rates |  |  |  |  |  |  |  |  |  |  |  |
Amount computed using the standard rate of corporate tax |  |  | (30,548 | ) |  |  | (14,115 | ) |  |  | 25,089 |
Adjustments to valuation allowance and uncertain tax position |  |  | 25,361 |  |  |  | 19,980 |  |  |  | (25,704 | )
Permanent and currency differences |  |  | (2,540 | ) |  |  | (4,195 | ) |  |  | 1,309 |
Change in tax rate |  |  | 8,508 |  |  |  | — |  |  |  | — |
Tax expense charge related to the current year |  |  | 781 |  |  |  | 1,670 |  |  |  | 694 |
The significant components of the Partnership’s deferred tax assets (liabilities) included in other assets were as follows:
|  | Year Ended December 31, 2011 $ |  |  | Year Ended December 31, 2010 $ |
Derivative instruments |  |  | 59,724 |  |  |  | 32,996 |
Taxation loss carryforwards |  |  | 35,554 |  |  |  | 38,914 |
Vessels and equipment |  |  | 2,178 |  |  |  | 2,182 |
Capitalized interest |  |  | (3,123 | ) |  |  | (3,604 | )
|  |  | 94,333 |  |  |  | 70,488 |
Valuation allowance |  |  | (89,236 | ) |  |  | (66,841 | )
Net deferred tax assets |  |  | 5,097 |  |  |  | 3,647 |
The Partnership had tax losses in the United Kingdom (or UK) of $26.8 million as at December 31, 2011 that are available indefinitely for offset against future taxable income in the UK. The Partnership had tax losses in Spain of 63.6 million Euros (approximately $82.4 million) as at December 31, 2011 that are available to be carried forward for 15 years for offset against future taxable income in Spain. The Partnership also had tax losses in Luxembourg of 71.2 million Euros (approximately $92.3 million) as at December 31, 2011 that are available indefinitely for offset against taxable future income in Luxembourg. Certain of the balances in the comparative columns above have been adjusted with no impact on the amount of the net deferred tax assets. As of December 31, 2007, the Partnership had unrecognized tax benefits of 3.4 million Euros (approximately $5.4 million) relating to a re-investment tax credit related to a 2005 annual tax filing. During the third quarter of 2008, the Partnership received the refund on the re-investment tax credit and met the more-likely-than-not recognition threshold. As a result, the Partnership reflected this refund as a credit to equity as the original vessel sale transaction was a related party transaction reflected in equity. The relevant tax authorities have challenged the eligibility of the re-investment tax credit. As a result, the Partnership believed the more-likely-than-not threshold was no longer met and recognized a liability of 3.4 million Euros (approximately $4.7 million) and reversed the benefit of the refund against equity as of December 31, 2009. As at December 31, 2011, a liability of 4.2 million Euros (approximately $5.5 million) relating to the re-investment tax credit is included in other long-term liabilities. Subsequent to December 31, 2011, the relevant tax authorities accepted the Partnership’s claim on its re-investment tax credit. The Partnership recognizes interest and penalties related to uncertain tax positions in income tax expense. During the years ended December 31, 2011, 2010 and 2009, the Partnership incurred $0.3 million, $1.0 million and $0.5 million, respectively, of accrued interest and penalties relating to income taxes. The tax years 2005 through 2011 currently remain open to examination by the major tax jurisdictions to which the Partnership is subject.

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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 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 136, 172 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 43, 44, 45, 46, 47, 48, 49 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 5: 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 6: 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 7: 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 8: 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=6881521&loc=d3e23780-122690 + Details
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