Income taxes

9 Months Ended

Sep. 30, 2021

The Company determines its tax provision for interim periods using an estimate of its annual effective tax rate adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter, the Company updates its estimate of the annual effective tax rate, and if its estimated tax rate changes, the Company makes a cumulative adjustment.

The Company’s effective tax rate (“ETR”) was 21.9% for the nine months ended September 30, 2021, down from 22.3% for the nine months ended September 3o, 2020.

The Company’s ETR was 17.3% for the three months ended September 30, 2021, down from 22.6% for the three months ended September 30, 2020. The decrease in the Company’s ETR is primarily due to the recording of interest income received on tax refunds in India and certain other discrete benefits recorded in the three months ended September 30, 2021.

As of December 31, 2020, the Company had unrecognized tax benefits amounting to $34,300, which, if recognized, would impact the Company’s ETR.

The following table summarizes activities related to the Company’s unrecognized tax benefits for uncertain tax positions for the nine months ended September 30, 2021:


	Nine months ended September 30,2021
Opening balance at January 1	$	34,300
Increase related to prior year tax positions, including recorded in acquisition accounting	686
Decrease related to settlements with tax authorities	(5,640)
Decrease related to prior year tax position due to lapse of applicable statute of limitation	(175)
Effect of exchange rate changes	(786)
Closing balance at September 30	$	28,385

23. Income taxes (Continued)

The Company’s unrecognized tax benefits as of September 30, 2021 amounted to $28,385, which, if recognized, would impact the Company’s ETR.

As of December 31, 2020 and September 30, 2021, the Company had accrued approximately $6,369 and $2,883, respectively, in interest and $900 and $869, respectively, for penalties relating to unrecognized tax benefits.

During the year ended December 31, 2020 and the nine months ended September 30, 2021, the Company recognized approximately $662 and $(3,400), respectively, in interest on unrecognized tax benefits.

- 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.

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