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Income Taxes (Tables)

12 Months Ended

Sep. 30, 2020

Income Tax Disclosure [Abstract]

Provision (benefit) for Income Taxes

The provision (benefit) for income taxes consists of the following:

		Year Ended September 30,
		2020				2019				2018
Current		$	55,243			$	102,391			$	42,047
Deferred			30,239				(13,950	)			25,098
Income taxes		$	85,482			$	88,441			$	67,145

Components of Deferred Tax Assets and Liabilities

Deferred income taxes are comprised of the following components:

		As of September 30,
		2020				2019
Deferred tax assets:
Deferred revenue		$	25,252			$	30,659
Employee compensation and benefits			75,689				76,327
Intangible assets, computer software and intellectual property			18,705				11,805
Tax credits, net capital and operating loss carryforwards			142,718				153,062
Lease liabilities			71,204				—
Other			52,611				73,249
Total deferred tax assets			386,179				345,102
Valuation allowances			(69,455	)			(85,533	)
Total deferred tax assets, net			316,724				259,569
Deferred tax liabilities:
Anticipated withholdings on subsidiaries’ earnings			(81,489	)			(70,961	)
Intangible assets, computer software and intellectual property			(114,772	)			(104,926	)
Lease assets			(69,215	)			—
Other			(90,825	)			(81,736	)
Total deferred tax liabilities			(356,301	)			(257,623	)
Net deferred tax (liabilities) assets		$	(39,577	)		$	1,946

Effective Income Tax Rate Varied from Statutory Guernsey Tax Rate

The effective income tax rate varied from the statutory Guernsey tax rate as follows:

		Year Ended September 30,
		2020				2019				2018
Statutory Guernsey tax rate			0	%			0	%			0	%
Foreign taxes(1)			14.7				15.6				15.9
Effective income tax rate			14.7	%			15.6	%			15.9	%

As a Guernsey company subject to a corporate tax rate of zero percent, the Company’s overall effective tax rate is attributable to foreign taxes. The Company’s income before income tax expense is considered to be foreign income.

(1) Foreign taxes for the year ended Sep 30, 2020:

In fiscal year 2020, foreign taxes included a total amount of releases of gross unrecognized tax benefits of $47,582 relating to effectively settled arrangements with tax authorities, changes in facts and circumstances resulting in a change in measurement of certain positions and expiration of the periods set forth in statutes of limitations in certain jurisdictions. The majority of the release was offset by decrease in tax assets and increase in tax liabilities and as a result a net benefit of $14,971 was included within income tax expense for fiscal year 2020.

Foreign taxes in fiscal year 2020 also included a benefit of $15,438 resulting from the release of valuation allowances on deferred tax assets at certain of the Company’s subsidiaries, which will, more likely than not, be realized due to the Company’s projections of future taxable income.

On March 27, 2020, the U.S. government enacted the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) to provide certain relief as a result of the COVID-19 outbreak. Some of the key income tax-related provisions of the CARES Act include modification in the usage of net operating losses, interest deductions and payroll benefits. Furthermore, other governments have offered and may continue to offer support to companies who operate in those countries.

Foreign taxes in fiscal year 2020 also included a tax benefit of $4,964 resulting from tax enactments related to the COVID-19 in certain jurisdictions.

(1) Foreign taxes for the year ended Sep 30, 2019:

In fiscal year 2019, foreign taxes included a benefit of $26,529 that was primarily attributable to the expiration of the periods set forth in statutes of limitations and to a lesser extent from the conclusions of tax audits related to unrecognized tax benefits accumulated over several years in certain jurisdictions.

Foreign taxes in fiscal year 2019 also included a benefit of $12,650 resulting from the release of valuation allowances on deferred tax assets at certain of the Company’s subsidiaries, which will, more likely than not, be realized due to the Company’s projections of future taxable income.

(1) Foreign taxes for the year ended Sep 30, 2018:

In fiscal year 2018, foreign taxes included a benefit of $9,564 due to conclusions of tax audits in certain jurisdictions, which resulted in an increase to the Company’s tax credits carryforwards and a reduction to the Company’s provision for gross unrecognized tax benefits. In addition, foreign taxes in fiscal year 2018 included a benefit of $18,022 that was attributable to the expiration of the periods set forth in statutes of limitations related to unrecognized tax benefits accumulated over several years in certain jurisdictions. Foreign taxes in fiscal year 2018 also included a tax expenses of $12,032 resulting from the creation of valuation allowances on deferred tax assets at certain of the Company’s subsidiaries, which may not be realized based on the Company’s projections of future taxable income.

In addition, foreign taxes in fiscal year 2018 included a provisional expense of $2,321 relating to changes in tax law in the United States pursuant to SAB No. 118. The provisional expense is attributable to deemed repatriation of foreign income partially offset by a benefit resulting from the re-evaluation of the Company’s deferred tax assets and liabilities due to the expected lower blended effective U.S. federal tax rate when the assets and liabilities are expected to be utilized.

As an indirect consequence to the changes in tax law in the United States the Company no longer makes a permanently reinvest assertion relating to one of its subsidiaries, therefore, a provisional tax liability of $4,059 was recorded related to the tax implications of remitting earnings that were previously asserted as permanently reinvested.

During fiscal year 2018, as a result of funding decisions for the construction of the Company’s new campus in Israel, see also Note 2, the Company recorded a tax benefit of $28,795 related to the release of withholding and income tax reserves for unremitted earnings.

Aggregate Changes in Balance of Company's Gross Unrecognized Tax Benefits

The aggregate changes in the balance of the Company’s gross unrecognized tax benefits were as follows:

		Year Ended September 30,
		2020				2019				2018
Balance at beginning of fiscal year		$	169,322			$	187,646			$	193,024
Additions based on tax positions related to the current year			23,154				19,530				20,329
Additions for tax positions of prior years			23,292				27,558				6,743
Reductions for tax positions of prior years			(15,214	)			(2,578	)			(10,548	)
Settlements with tax authorities(1)			(29,400	)			(37,672	)			(3,880	)
Lapse of statute of limitations			(2,968	)			(25,162	)			(18,022	)
Balance at end of fiscal year		$	168,186			$	169,322			$	187,646

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