XML 29 R18.htm IDEA: XBRL DOCUMENT

Income taxes

9 Months Ended

Sep. 30, 2021

12	Income taxes

The Company recorded $0.1 million in income tax expense in the three months ended September 30, 2021, and $3.6 million in the nine months ended September 30, 2021. The Company recorded no income tax expense during the same periods in 2020.

As of December 31, 2020, the Company had recorded a full valuation allowance against its Dutch net deferred tax assets. On May 6, 2021, the CSL Behring Agreement became effective (refer to Note 4 “Collaboration arrangements and concentration of credit risk”). The Company recorded $462.4 million of license revenue related to closing the transaction. The Company intends to record such revenue in its Dutch tax return related to the 12-month period ended December 31, 2020. As such, the Company expects to file a return showing a taxable profit in the Netherlands in 2020, which would result in the consumption of substantially all of its Dutch net operating losses for the years 2011 to 2018. The Company’s remaining Dutch net operating tax losses carried forward would relate to 2019. The Dutch government on June 4, 2021 enacted legislation, whereby such net operating tax losses can be carried forward indefinitely. The Company expects to continue incurring tax losses for the foreseeable future including 2021. As such, the Company retained its full valuation allowance related to the net deferred assets as of September 30, 2021. The adjustment to the Company’s 2020 filing position resulting in the release and consumption of prior year net operating tax losses carried forward was treated as a discrete event in the nine months ended September 30, 2021. The Company allocated part of the release to the tax benefit of share issuance cost incurred in 2014, 2015, 2017 and 2018. This resulted in an increase of additional paid-in capital as well as deferred tax expenses of $3.0 million.

The Company released its valuation allowance against the Company’s deferred tax assets in the United States as of December 31, 2020. The Company recorded $0.2 million and $0.7 million deferred tax expense in relation to its operations in the United States during the three and nine months ended September 30, 2021, respectively. The Company recorded a nil net deferred tax expense in the prior year as it had recorded a valuation allowance against its net deferred tax assets in the United States as of September 30, 2020.

In connection with the Corlieve acquisition, the Company recognized a deferred tax liability related to acquired identifiable intangible assets net of net operating tax losses carried forward of EUR 11.5 million ($13.6 million) as of the Acquisition Date. The Company recorded deferred tax income of $0.2 million related to reduction of the net deferred tax liability between the Acquisition Date and September 30, 2021 as a result of incurring net operating losses in France.

The effective income tax rates of 0.2% and -1.1% during the three and nine months ended September 30, 2021, respectively, are substantially lower than the enacted rate of 25% in the Netherlands. This is a result of the Company recording a valuation allowance against its remaining net deferred tax assets in the Netherlands as of December 31, 2020 and September 30, 2021.

- 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 + Details