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Income Taxes | 6 Months Ended
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Jun. 30, 2019
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES The worldwide effective income tax rates for the first fiscal six months of 2019 and 2018 were 18.4% and 20.4%, respectively. The U.S. Tax Cuts and Jobs Act (TCJA) was enacted into law effective January 1, 2018. This law reduced the U.S. statutory corporate tax rate from 35% to 21%, eliminated or reduced certain corporate income tax deductions and introduced a tax on Global Intangible Low-Taxed Income (GILTI) and a Base Erosion and Anti Abuse Tax (BEAT). During the first fiscal six months of 2018, the Company estimated the impact of these changes based on the best information and guidance available at that time. Subsequent U.S. Treasury guidance on the application of these provisions allowed the Company to better refine these calculations for fiscal year 2018 and when combined with the election to account for GILTI under the deferred method reduced the first fiscal six months of 2019 effective income tax rate by approximately 2.5% versus the first fiscal six months of 2018. This reduction was partially offset by the Company having more income in higher tax jurisdictions relative to lower tax jurisdictions, including the one-time impact of the ASP divestiture, which was primarily taxed in the U.S., as compared to the same period in 2018. As of June 30, 2019, the Company had approximately $3.3 billion of liabilities from unrecognized tax benefits. The Company believes it is possible that audits may be completed by tax authorities in some jurisdictions over the next twelve months. The Company is not able to provide a reasonably reliable estimate of the timing of any future tax payments relating to uncertain tax positions. With respect to the United States, the IRS has completed its audit for the tax years through 2009 and is currently auditing the tax years 2010 through 2012. The Company currently expects substantial completion of this audit within the next twelve months. The outcome from this tax audit may result in adjustments to the Company’s current estimates that may have a material impact on the Company’s current and future operating results or cash flows in the period that the audit is substantially completed. Swiss Tax Reform On September 28, 2018 the Swiss Parliament approved the Federal Act on Tax Reform and AHV Financing (TRAF). On May 19, 2019 a public referendum was held in Switzerland that approved the federal reform proposals and subsequently announced the TRAF will become effective on January 1, 2020. In the fiscal third quarter of 2019, the Swiss Federal Council enacted TRAF. TRAF provides for parameters which enable the Swiss cantons to establish localized tax rates and regulations for multinational companies. The new cantonal tax parameters include favorable tax benefits for patents and an additional research and development tax deduction to encourage investment. The cantons are required to implement new local legislation by January 1, 2020 or the new federal law will be directly applied. The significant cantons in which the Company operates have not yet enacted legislation in response to TRAF. The transitional provisions of TRAF are also expected to allow companies to elect tax basis adjustments to fair value which is used for tax depreciation and amortization purposes resulting in a deduction over the transitional period. The adjustment in the Company’s asset tax basis will likely require review and approval by the federal and cantonal tax agencies. The Company has not yet applied for the adjustment to the tax basis. As TRAF was not enacted as of June 30, 2019, the Company has not reflected the financial impacts in its fiscal second quarter results. The Company estimates the impact of revaluing its deferred tax assets and liabilities as a result of Swiss Federal enactment of TRAF, without consideration of future cantonal tax rate changes or the transitional provisions, to result in an incremental tax expense between $0.3 billion to $0.5 billion in the fiscal third quarter of 2019. The financial impact of the future cantonal tax rate changes or the transitional provisions cannot currently be reasonably estimated but may result in a material impact to the future results of the Company.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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