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Income Taxes | 12 Months Ended
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Dec. 30, 2017
Income Tax Disclosure [Abstract] |
Income Taxes | 6. Income Taxes The Company’s income tax provision (benefit) consists of the following:
|  | Fiscal Year Ended |
|  | December 30, |  |  | December 31, |  |  | December 26, |
|  | 2017 |  |  | 2016 |  |  | 2015 |
Federal: |  |  |  |  |  |  |  |  |  |  |  |
Current |  | $ | 31,343 |  |  | $ | 66,627 |  |  | $ | 49,138 |
Deferred |  |  | 50,936 |  |  |  | 5,343 |  |  |  | 4,216 |
|  | $ | 82,279 |  |  | $ | 71,970 |  |  | $ | 53,354 |
State: |  |  |  |  |  |  |  |  |  |  |  |
Current |  |  | 4,203 |  |  |  | 8,809 |  |  |  | 9,354 |
Deferred |  |  | 11,712 |  |  |  | (3,823 | ) |  |  | (5,858 | )
|  | $ | 15,915 |  |  | $ | 4,986 |  |  | $ | 3,496 |
Foreign: |  |  |  |  |  |  |  |  |  |  |  |
Current |  |  | 43,688 |  |  |  | 42,406 |  |  |  | 55,730 |
Deferred |  |  | (154,543 | ) |  |  | (506 | ) |  |  | (1,620 | )
|  | $ | (110,855 | ) |  | $ | 41,900 |  |  | $ | 54,110 |
Total |  | $ | (12,661 | ) |  | $ | 118,856 |  |  | $ | 110,960 |
The income tax provision differs from the amount computed by applying the U.S. statutory federal income tax rate to income before taxes. The sources and tax effects of the differences, including the impact of establishing tax contingency accruals, are as follows:
|  | Fiscal Year Ended |
|  | December 30, |  |  | December 31, |  |  | December 26, |
|  | 2017 |  |  | 2016 |  |  | 2015 |
Federal income tax expense at U.S. statutory rate |  | $ | 238,803 |  |  | $ | 220,385 |  |  | $ | 198,516 |
State income tax expense, net of federal tax effect |  |  | 5,977 |  |  |  | 2,749 |  |  |  | 1,931 |
Foreign tax rate differential |  |  | (102,316 | ) |  |  | (111,989 | ) |  |  | (100,010 | )
Other foreign taxes less incentives and credits |  |  | (4,646 | ) |  |  | (16,593 | ) |  |  | (8,592 | )
Withholding Tax |  |  | 14,632 |  |  |  | 17,447 |  |  |  | 16,969 |
Net Change in Uncertain Tax Positions |  |  | 5,363 |  |  |  | 17,328 |  |  |  | 21,246 |
Federal Domestic Production Activities Deduction |  |  | (3,895 | ) |  |  | (5,528 | ) |  |  | (4,589 | )
Federal Research and Development Credit |  |  | (10,851 | ) |  |  | (8,548 | ) |  |  | (8,573 | )
Switzerland Corporate Tax Election |  |  | (180,034 | ) |  |  | - |  |  |  | - |
Share Based Compensation |  |  | 19,916 |  |  |  | - |  |  |  | - |
Other, net |  |  | 4,390 |  |  |  | 3,605 |  |  |  | (5,938 | )
Income tax expense |  | $ | (12,661 | ) |  | $ | 118,856 |  |  | $ | 110,960 |
In the year ended December 30, 2017, the Company recorded an income tax benefit of $180,034 as a result of the Company’s February 2017 election to align certain Switzerland corporate tax positions with evolving international tax initiatives. The Company’s statutory federal income tax rate in Switzerland, the Company's place of incorporation since the Redomestication, effective June 27, 2010, is 7.83%. If the Company reconciled taxes at the Swiss holding company federal statutory tax rate to the reported income tax for 2017 as presented above, the amounts related to tax at the statutory rate would be approximately $186,000 lower, or $53,600, and the foreign tax rate differential would be adjusted by a similar amount to approximately $77,000. For 2016, the amounts related to tax at the statutory rate would be approximately $171,000 lower, or $49,000, and the foreign tax rate differential would be adjusted by a similar amount to approximately $55,000. For 2015, the amount related to tax at the statutory rate would be approximately $154,000 lower, or $44,000, and the foreign tax differential would be reduced by a similar amount to approximately $52,000. All other amounts would remain substantially unchanged. The Company’s income before income taxes attributable to non-U.S. operations was $461,436, $453,729, and $403,242, for the years ended December 30, 2017, December 31, 2016, and December 26, 2015, respectively. Income taxes of $20,287, $22,139, and $21,085 at December 30, 2017, December 31, 2016, and December 26, 2015, respectively, have not been accrued by the Company for the unremitted earnings of several of its foreign subsidiaries because such earnings are intended to be reinvested in the subsidiaries indefinitely. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows:
|  | December 30, |  |  | December 31, |
|  | 2017 |  |  | 2016 |
Deferred tax assets: |  |  |  |  |  |  |  |
Product warranty accruals |  | $ | 2,202 |  |  | $ | 2,768 |
Allowance for doubtful accounts |  |  | 5,129 |  |  |  | 10,100 |
Inventory reserves |  |  | 6,920 |  |  |  | 8,953 |
Sales program allowances |  |  | 910 |  |  |  | 1,397 |
Reserve for sales returns |  |  | 816 |  |  |  | 2,196 |
Other accruals |  |  | 10,722 |  |  |  | 13,548 |
Share based compensation |  |  | 6,261 |  |  |  | 29,632 |
Tax credit carryforwards |  |  | 8,413 |  |  |  | 5,012 |
Amortization |  |  | 165,162 |  |  |  | 15,368 |
Deferred Revenue |  |  | 4,690 |  |  |  | 32,487 |
Net operating losses of subsidiaries |  |  | 8,799 |  |  |  | 5,403 |
Benefit related to uncertain tax positions |  |  | 5,383 |  |  |  | 7,542 |
Other |  |  | 3,677 |  |  |  | 4,005 |
Valuation allowance related to loss carryforward and tax credits |  |  | (7,267 | ) |  |  | (4,622 | )
|  | $ | 221,817 |  |  | $ | 133,789 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Depreciation |  |  | 11,674 |  |  |  | 17,854 |
Prepaid Expenses |  |  | 3,147 |  |  |  | 2,876 |
Book basis in excess of tax basis for acquired entities |  |  | 17,364 |  |  |  | 3,865 |
Withholding tax |  |  | 60,555 |  |  |  | 58,597 |
Other |  |  | 4,950 |  |  |  | 1,523 |
|  |  | 97,690 |  |  |  | 84,715 |
Net deferred tax assets |  | $ | 124,127 |  |  | $ | 49,074 |
At December 30, 2017, the Company had $8,413 of tax credit carryover compared to $5,012 at December 31, 2016. At December 30, 2017, the Company had a deferred tax asset of $8,799 related to the future tax benefit on net operating loss (NOL) carryforwards of $70,419. Included in the NOL carryforwards is $43,210 that relates to Switzerland and expires in varying amounts between 2023 and 2024, $1,757 that relates to Finland and expires in varying amounts between 2025 and 2027, $10,610 that relates to the United States and various state jurisdictions and expires in varying amounts between 2022 and 2037, $5,234 that relates to the Netherlands and expires in 2026 and $9,608 that relates to various other jurisdictions and has no expiration date. The Company has recorded a valuation allowance for a portion of its deferred tax asset relating to various tax attributes that it does not believe are more likely than not to be realized. In the future, if the Company determines, based on existence of sufficient evidence, that it should realize more or less of its deferred tax assets, an adjustment to the valuation allowance will be made in the period such a determination is made. On December 22, 2017, the Tax Cuts and Jobs Act was enacted into law in the United States. The new tax legislation contains several provisions that will impact the Company, including the reduction of the corporate income tax rate from 35% to 21%, acceleration of business asset expensing, and a reduction in the amount of executive pay that may qualify as a tax deduction, among others. The decrease in the corporate income tax rate will require the Company to remeasure its U.S. deferred tax assets and liabilities, as well as reassess the realizability of its deferred tax assets and liabilities. FASB ASC 740 requires the recognition of the effects of tax law changes in the period of enactment. However, due to the complexities of the new tax legislation, the SEC has issued SAB 118 which allows for the recognition of provisional amounts during a measurement period similar to the measurement period used when accounting for business combinations. The Company has recorded a provisional re-measurement of its deferred tax assets and liabilities, resulting in an immaterial impact on its 2017 income tax provision. The Company will continue to assess the impact of the new tax legislation, as well as any related future regulations and rules, and will record any additional impacts as identified during the measurement period, if necessary. The Company does not expect any such potential adjustments in the future periods will materially impact the Company’s financial condition or result of operations. The total amount of gross unrecognized tax benefits as of December 30, 2017 was $130,798. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits for years ended December 30, 2017, December 31, 2016, and December 26, 2015 is as follows:
|  | December 30, |  |  | December 31, |  |  | December 26, |
|  | 2017 |  |  | 2016 |  |  | 2015 |
Balance beginning of year |  | $ | 115,090 |  |  | $ | 97,904 |  |  | $ | 77,495 |
Additions based on tax positions related to prior years |  |  | 8,564 |  |  |  | 489 |  |  |  | 89 |
Reductions based on tax positions related to prior years |  |  | (983 | ) |  |  | (940 | ) |  |  | (1,671 | )
Additions based on tax positions related to current period |  |  | 26,295 |  |  |  | 28,859 |  |  |  | 29,019 |
Reductions related to settlements with tax authorities |  |  | - |  |  |  | (134 | ) |  |  | (364 | )
Expiration of statute of limitations |  |  | (18,168 | ) |  |  | (11,088 | ) |  |  | (6,664 | )
Balance at end of year |  | $ | 130,798 |  |  | $ | 115,090 |  |  | $ | 97,904 |
Accounting guidance requires unrecognized tax benefits to be classified as noncurrent liabilities, except for the portion that is expected to be paid within one year of the balance sheet date. The entire balance of net unrecognized benefits of $127,306, $109,667 and $93,654 are required to be classified as noncurrent at December 30, 2017, December 31, 2016, and December 26, 2015, respectively. The net unrecognized tax benefits, if recognized, would reduce the effective tax rate. None of the unrecognized tax benefits are due to uncertainty in the timing of deductibility. Interest and penalties, if any, accrued on the unrecognized tax benefits are reflected in income tax expense. At December 30, 2017, December 31, 2016, and December 26, 2015, the Company had accrued approximately $5,605, $3,901, and $2,479, respectively, for interest. The interest component of the reserve increased income tax expense for the years ending December 30, 2017, December 31, 2016, and December 26, 2015, by $1,704, $1,422, and $320 respectively. The Company did not have significant amounts accrued for penalties for the years ending December 30, 2017, December 31, 2016, and December 26, 2015. The Company files income tax returns in Switzerland, U.S. federal jurisdiction, as well as various states, local, and foreign jurisdictions. In its major tax jurisdictions, Switzerland, Taiwan, United Kingdom, and U.S. federal and various states, the Company is no longer subject to income tax examinations by tax authorities, with few exceptions, for years prior to 2013, 2012, 2015, and 2014, respectively. The Company recognized a reduction of income tax expense of $17,918, $11,151, and $6,971 in fiscal years ended December 30, 2017, December 31, 2016, and December 26, 2015, respectively, to reflect the expiration of statutes of limitations and releases due to audit settlement in various jurisdictions. The Company believes that it is reasonably possible that approximately $20,000 to $25,000 of its reserves for certain unrecognized tax benefits will decrease within the next 12 months as the result of the expiration of statutes of limitations. This potential decrease in unrecognized tax benefits would impact the Company’s effective tax rate within the next 12 months.

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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 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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