XML 24 R13.htm IDEA: XBRL DOCUMENT v3.23.3
INCOME AND MINING TAXES
 9 Months Ended
Sep. 30, 2023
Income Tax Disclosure [Abstract]  
INCOME AND MINING TAXES INCOME AND MINING TAXES
The Company’s consolidated effective income tax rate was (8.8)% for the first nine months of 2023 compared to 7.1% for the first nine months of 2022. The primary drivers of the change in the effective rate were due to foreign currency fluctuations, particularly with the devaluation of the Turkish Lira relative to the USD, partially offset by the effects of the corporate tax rate increase in Türkiye.
In July 2023, the Republic of Türkiye enacted an increase in the corporate income tax rate. The corporate income tax rate of 20% increased to 25% for 2023 and subsequent years. The increase is effective on July 15, 2023 with retroactive application to January 1, 2023. As a result of the rate increase, the Company incurred deferred income tax expense of approximately $68.9 million.
The Company’s statutory tax rate for the period is 27.0%. The effective rate differs from the statutory rate primarily due to foreign currency fluctuations, particularly with the devaluation of the Turkish Lira relative to the USD, partially offset by the effects of the corporate tax rate in Türkiye.
Unrecognized Tax Benefits
The Company records uncertain tax positions on the basis of a two-step process in which (1) the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions meeting the “more-likely-than-not” recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority.
A reconciliation of the beginning and ending amount of gross unrecognized tax benefits, inclusive of interest and penalties, is as follows (in thousands):
Nine Months Ended September 30,
20232022
Balance as of January 1$8,574 $— 
Increase associated with tax positions taken during the current year— — 
Increase (decrease) associated with tax positions taken during a prior year (1)
(7,218)9,200 
Settlements(1,356)— 
Decrease associated with lapses in statutes of limitation— — 
Balance as of September 30 (1)
$— $9,200 

(1) Of the gross unrecognized tax benefits, nil were recognized as current liabilities in Condensed Consolidated Balance Sheet as of September 30, 2023.
As of September 30, 2023 and December 31, 2022, nil and $8.6 million, respectively, represent the amount of unrecognized tax benefits, inclusive of interest and penalties that, if recognized, would impact the Company’s effective income tax rate. As of September 30, 2023 and December 31, 2022, the total amount of accrued income-tax-related interest and penalties included in the Condensed Consolidated Balance Sheets were nil and $5.2 million.
On March 12, 2023, Türkiye enacted Tax Amnesty legislation, which allows taxpayers to voluntarily pay tax on uncertain tax positions and waives assessed interest, penalties up to 50.0% of tax and risk of audit if paid in accordance with the process outlined in the legislation. As a result, during the nine months ended September 30, 2023, the Company released $7.2 million of tax, interest, and penalties in Income and mining tax benefit (expense) in the Condensed Consolidated Statements of Operations. During the third quarter of 2023, the Company paid $1.4 million in a cash settlement in accordance with its Tax Amnesty agreement.