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Income Taxes
6 Months Ended
Sep. 28, 2019
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes
Swiss Tax Reform
In May 2019, a public referendum was held in Switzerland that approved the Federal Act on Tax Reform and AHV Financing (the "Swiss Tax Act"), which becomes effective January 1, 2020. The Swiss Tax Act eliminates certain preferential tax items at both the federal and cantonal levels for multinational companies, and provides the cantons with parameters for establishing local tax rates and regulations.
During the second quarter of Fiscal 2020, the Swiss Tax Act was enacted into law, resulting in an immaterial adjustment associated with the revaluation of the Company's Swiss deferred tax assets and liabilities and current estimated annual effective tax rate. The Company also expects the tax authorities to issue additional guidance with respect to the implementation of transitional provisions during the second half of Fiscal 2020, which may have a material impact on the Company's consolidated financial statements.
Effective Tax Rate
The Company's effective tax rate, which is calculated by dividing each fiscal period's income tax provision by pretax income, was 23.1% and 21.9% during the three-month and six-month periods ended September 28, 2019, respectively, and 20.7% and 19.7% during the three-month and six-month periods ended September 29, 2018, respectively. The effective tax rates for the three-month and six-month periods ended September 28, 2019 were slightly higher than the U.S. federal statutory income tax rate of 21% primarily due to additional income tax reserves largely associated with certain income tax audits. The effective tax rates for the three-month and six-month periods ended September 29, 2018 were slightly lower than the U.S. federal statutory income tax rate of 21%, reflecting the favorable impact of a measurement period adjustment recorded in connection with the TCJA, as discussed below.
During the second quarter of Fiscal 2019, the Company recorded a TCJA measurement period adjustment as a result of the issuance of new interpretive guidance related to stock-based compensation for certain executives, whereby it recorded an income tax benefit and corresponding deferred tax asset of $4.7 million. This measurement period adjustment reduced the Company's effective tax rate by 220 basis points and 130 basis points during the three-month and six-month periods ended September 29, 2018, respectively. Refer to Note 10 of the Fiscal 2019 10-K for further discussion regarding the TCJA.
Uncertain Income Tax Benefits
The Company classifies interest and penalties related to unrecognized tax benefits as part of its income tax provision. The total amount of unrecognized tax benefits, including interest and penalties, was $79.7 million and $78.8 million as of September 28, 2019 and March 30, 2019, respectively, and is included within non-current liability for unrecognized tax benefits in the consolidated balance sheets.
The total amount of unrecognized tax benefits that, if recognized, would affect the Company's effective tax rate was $71.4 million and $70.7 million as of September 28, 2019 and March 30, 2019, respectively.
Future Changes in Unrecognized Tax Benefits
The total amount of unrecognized tax benefits relating to the Company's tax positions is subject to change based on future events including, but not limited to, settlements of ongoing tax audits and assessments and the expiration of applicable statutes of limitations. Although the outcomes and timing of such events are highly uncertain, the Company does not anticipate that the balance of gross unrecognized tax benefits, excluding interest and penalties, will change significantly during the next twelve months. However, changes in the occurrence, expected outcomes, and timing of such events could cause the Company's current estimate to change materially in the future.
The Company files a consolidated U.S. federal income tax return, as well as tax returns in various state, local, and foreign jurisdictions. The Company is generally no longer subject to examinations by the relevant tax authorities for years prior to its fiscal year ended March 30, 2013.