XML 34 R24.htm IDEA: XBRL DOCUMENT
v3.22.0.1

INCOME TAXES | 6 Months Ended
--- | ---
Dec. 31, 2021
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 30.8% for the three months ended December 31, 2021, compared to a provision of 132.4% for the three months ended December 31, 2020. Tax expense decreased from $267.6 million during the three months ended December 31, 2020 to $39.3 million during the three months ended December 31, 2021. This was primarily due to (i) a decrease of $299.3 million related to Internal Revenue Service (IRS) settlements in Fiscal 2021, (ii) a decrease of $20.2 million relating to lower net income before taxes including the impact of foreign rates, (iii) a decrease of $7.3 million related to differences in tax filings being lower than estimates and (iv) a decrease of $6.0 million related to the US Base Erosion and Anti-Abuse Tax (US BEAT). These were partially offset by (i) an increase of $93.4 million for changes in unrecognized tax benefits and (ii) an increase of $4.9 million related to tax benefits of internal reorganizations in Fiscal 2021 that did not reoccur in Fiscal 2022. The remainder of the difference was due to normal course movements and non-material items. The effective tax rate decreased to a provision of 27.3% for the six months ended December 31, 2021, compared to a provision of 89.1% for the six months ended December 31, 2020. Tax expense decreased from $310.3 million during the six months ended December 31, 2020 to $82.7 million during the six months ended December 31, 2021. This was primarily due to (i) a decrease of $299.3 million related to IRS settlements in Fiscal 2021, (ii) a decrease of $12.0 million relating to lower net income before taxes including the impact of the foreign rates, (iii) a decrease of $10.5 million related to differences in tax filings being lower than estimates and (iv) a decrease of $10.1 million related to US BEAT. These were partially offset by (i) an increase of $89.8 million for changes in unrecognized tax benefits and (ii) an increase of $12.5 million related to tax benefits of internal reorganizations in Fiscal 2021 that did not reoccur in Fiscal 2022. 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 and six months ended December 31, 2021 and 2020, respectively, we recognized the following amounts as income tax-related interest expense and penalties:
| Three Months Ended December 31, |  | Six Months Ended December 31,
| 2021 |  | 2020 |  | 2021 |  | 2020
Interest expense (recoveries) | $ | 368 |  |  | $ | 41,558 |  |  | $ | 467 |  |  | $ | 44,107 |
Penalties expense (recoveries) | 199 |  |  | 705 |  |  | 173 |  |  | 383 |
Total | $ | 567 |  |  | $ | 42,263 |  |  | $ | 640 |  |  | $ | 44,490 |
The following amounts have been accrued on account of income tax-related interest expense and penalties:
| As of December 31, 2021 |  | As of June 30, 2021
Interest expense accrued (1) | $ | 5,615 |  |  | $ | 5,166 |
Penalties accrued (1) | $ | 2,556 |  |  | $ | 2,605 |
(1) 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 December 31, 2021, could decrease tax expense in the next 12 months by $4.2 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, 2016 for the United States, 2015 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, Germany, India, Austria, Italy, France and the Philippines. 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 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 of December 31, 2021, we have recognized a provision of $28.0 million (June 30, 2021—$27.5 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.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration