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Income Taxes | 3 Months Ended
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Sep. 30, 2019
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES Our effective tax rate represents the net effect of the mix of income earned in various tax jurisdictions that are subject to a wide range of income tax rates. The effective tax rate decreased to a provision of 23.7% for the three months ended September 30, 2019, compared to 45.1% for the three months ended September 30, 2018. The decrease in tax expense of $6.8 million was primarily due to a decrease of $10.8 million in reserves for unrecognized tax benefits resulting from taxation years becoming statute barred, a decrease of $3.4 million relating to the tax impact of internal reorganizations of subsidiaries that did not reoccur in the first quarter of Fiscal 2020, and a decrease of $2.0 million relating to higher research and development tax credits. These were partially offset by an increase in net income taxed at foreign rates of $8.5 million, and an increase of $2.9 million relating to base erosion and anti-abuse tax (BEAT). The remainder of the difference was due to normal course movements and non-material items. We recognize interest expense and penalties related to income tax matters in income tax expense. For the three months ended September 30, 2019 and 2018, we recognized the following amounts as income tax-related interest expense and penalties:
| Three Months Ended September 30,
| 2019 |  | 2018
Interest expense (recoveries) | $ | (1,418 | ) |  | $ | 3,037 |
Penalties expense (recoveries) | 231 |  |  | 492 |
Total | $ | (1,187 | ) |  | $ | 3,529 |
The following amounts have been accrued on account of income tax-related interest expense and penalties:
| As of September 30, 2019 |  | As of June 30, 2019
Interest expense accrued * | $ | 63,003 |  |  | $ | 64,530 |
Penalties accrued * | $ | 2,720 |  |  | $ | 2,525 |
* These balances are primarily included within "Long-term income taxes payable" within the Condensed Consolidated Balance Sheets. We believe that it is reasonably possible that the gross unrecognized tax benefits, as of September 30, 2019, could decrease tax expense in the next 12 months by $8.1 million, relating primarily to the expiration of competent authority relief and tax years becoming statute barred for purposes of future tax examinations by local taxing jurisdictions. Our four most significant tax jurisdictions are Canada, the United States, Luxembourg and Germany. Our tax filings remain subject to audits by applicable tax authorities for a certain length of time following the tax year to which those filings relate. The earliest fiscal years open for examination are 2012 for Germany, 2010 for the United States, 2012 for Luxembourg, and 2012 for Canada. We are subject to tax audits in all major taxing jurisdictions in which we operate and currently have tax audits open in Canada, the United States, France, Germany, India, the United Kingdom and Switzerland. On a quarterly basis we assess the status of these examinations and the potential for adverse outcomes to determine the adequacy of the provision for income and other taxes. Statements regarding the United States and Canada audits are included in note 14 "Guarantees and Contingencies". The timing of the resolution of income tax audits is highly uncertain, and the amounts ultimately paid, if any, upon resolution of the issues raised by the taxing authorities may differ from the amounts accrued. It is reasonably possible that within the next 12 months we will receive additional assessments by various tax authorities or possibly reach resolution of income tax audits in one or more jurisdictions. These assessments or settlements may or may not result in changes to our contingencies related to positions on tax filings. The actual amount of any change could vary significantly depending on the ultimate timing and nature of any settlements. We cannot currently provide an estimate of the range of possible outcomes. For more information relating to certain tax audits, please refer to note 14 "Guarantees and Contingencies". As at September 30, 2019, we have recognized a provision of $17.6 million (June 30, 2019—$17.4 million) in respect of both additional foreign taxes or deferred income tax liabilities for temporary differences related to the undistributed earnings of certain non-United States subsidiaries and planned periodic repatriations from certain German subsidiaries, that will be subject to withholding taxes upon distribution. We have not provided for additional foreign withholding taxes or deferred income tax liabilities related to undistributed earnings of all other non-Canadian subsidiaries, since such earnings are considered permanently invested in those subsidiaries or are not subject to withholding taxes. It is not practicable to reasonably estimate the amount of additional deferred income tax liabilities or foreign withholding taxes that may be payable should these earnings be distributed in the future.

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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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