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Taxes | 12 Months Ended
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Apr. 02, 2022
Income Tax Disclosure [Abstract] |
Taxes | Taxes The Company is a United Kingdom tax resident and is incorporated in the British Virgin Islands. Capri’s subsidiaries are subject to taxation in the United States and various other foreign jurisdictions, which are aggregated in the “Non-United States” information captioned below. Income (loss) before provision for income taxes consisted of the following (in millions):
| Fiscal Years Ended
| April 2, 2022 |  | March 27, 2021 |  | March 28, 2020
United States | $ | 247 |  |  | $ | (56) |  |  | $ | (28) |
Non-United States | 668 |  |  | 59 |  |  | (187) |
Total income (loss) before provision for income taxes | $ | 915 |  |  | $ | 3 |  |  | $ | (215) |
The provision for income taxes was as follows (in millions):
| Fiscal Years Ended |
| April 2, 2022 |  | March 27, 2021 |  | March 28, 2020 |
Current |  |  |  |  |  |
United States - Federal | $ | 36 |  |  | $ | 35 |  |  | $ | 4 |  | (1)
United States - State | 16 |  |  | 20 |  |  | 19 |  |
Non-United States | 98 |  |  | 81 |  |  | 60 |  |
Total current | 150 |  |  | 136 |  |  | 83 |  |
Deferred |  |  |  |  |  |
United States - Federal | 24 |  | (2) | (37) |  |  | (22) |  |
United States - State | 7 |  |  | (4) |  |  | (3) |  |
Non-United States | (89) |  | (3) | (29) |  |  | (48) |  |
Total deferred | (58) |  |  | (70) |  |  | (73) |  |
Total provision for income taxes | $ | 92 |  |  | $ | 66 |  |  | $ | 10 |  |
(1)Includes a $35 million current tax benefit due to a release of income tax reserves in the United States. (2)Impact of United States tax accounting method change filed during Fiscal 2022 with respect to cost capitalization. (3)Includes an Italian valuation allowance reversal during Fiscal 2022. The Company’s provision for income taxes for the years ended April 2, 2022, March 27, 2021 and March 28, 2020 was different from the amount computed by applying the statutory U.K. income tax rates to the underlying income (loss) before provision for income taxes as a result of the following (amounts in millions):
| Fiscal Years Ended |
| April 2, 2022 |  | March 27, 2021 |  | March 28, 2020 |
| Amount |  | % (1) |  | Amount |  | % (1) |  | Amount |  | % (1) |
Provision for income taxes at the U.K. statutory tax rate | $ | 174 |  |  | 19.0 | % |  | $ | 1 |  |  | 19.0 | % |  | (41) |  |  | 19.0 | % |
Effect of changes in valuation allowances on deferred tax assets | (67) |  |  | (7.3) | % |  | 24 |  |  | 955.7 | % |  | 67 |  |  | (30.9) | % | (2)
Effects of global financing arrangements | (56) |  |  | (6.1) | % |  | (24) |  |  | (953.4) | % |  | (41) |  |  | 21.7 | % | (3)
Brand tax basis step-up | (46) |  |  | (5.0) | % |  | — |  |  | — | % |  | — |  |  | — | % |
CARES Act tax loss carryback | (43) |  |  | (4.6) | % |  | — |  |  | — | % |  | — |  |  | — | % |
Liability for uncertain tax positions | 91 |  |  | 9.9 | % |  | 11 |  |  | 414.2 | % |  | (12) |  |  | 5.7 | % |
Tax rate change impact on deferred items | 21 |  |  | 2.1 | % |  | 9 |  |  | 351.3 | % |  | — |  |  | — | % |
State and local income taxes, net of federal benefit | 12 |  |  | 1.3 | % |  | 5 |  |  | 201.5 | % |  | 4 |  |  | (1.9) | % |
Differences in tax effects on foreign income | 10 |  |  | 1.1 | % |  | 13 |  |  | 522.4 | % |  | (7) |  |  | 1.2 | % |
Withholding tax | 5 |  |  | 0.6 | % |  | 4 |  |  | 165.0 | % |  | 3 |  |  | (1.6) | % |
Share based compensation | 3 |  |  | 0.4 | % |  | 6 |  |  | 247.7 | % |  | 9 |  |  | (4.2) | % |
Non-deductible goodwill impairment | — |  |  | — | % |  | 18 |  |  | 700.2 | % | (4) | 32 |  |  | (15.1) | % | (4)
Other | (12) |  |  | (1.3) | % |  | (1) |  |  | (33.1) | % | (5) | (4) |  |  | 1.4 | % |
Effective tax rate | $ | 92 |  |  | 10.1 | % |  | $ | 66 |  |  | 2,590.5 | % |  | $ | 10 |  |  | (4.7) | % |
(1)Tax rates are calculated using unrounded numbers. (2)Mainly attributable to valuation allowances established on a portion of non-United States deferred tax assets. (3)Mainly attributable to pre-tax loss position in Fiscal 2020. (4)Attributable to goodwill impairment charges related to Jimmy Choo reporting units in Fiscal 2021 and Fiscal 2020. (5)Primarily relates to individually immaterial United States and foreign permanent adjustments. Significant components of the Company’s deferred tax assets (liabilities) consist of the following (in millions):
| Fiscal Years Ended
| April 2, 2022 |  | March 27, 2021
Deferred tax assets |  |  |
Operating lease liabilities | $ | 465 |  |  | $ | 501 |
Net operating loss carryforwards | 108 |  |  | 139 |
Depreciation | 53 |  |  | 54 |
Sales allowances | 34 |  |  | 50 |
Inventories | 26 |  |  | 25 |
Accrued interest | 20 |  |  | 44 |
Stock compensation | 7 |  |  | 12 |
Payroll related accruals | 3 |  |  | 3 |
Derivative financial instruments | — |  |  | 32 |
Other | 46 |  |  | 42 |
Total deferred tax assets | 762 |  |  | 902 |
Valuation allowance | (92) |  | (1) | (159) |
Net deferred tax assets | 670 |  |  | 743 |
Deferred tax liabilities |  |  |
Goodwill and intangibles | (449) |  | (2) | (495) |
Operating lease right-of-use-assets | (340) |  |  | (367) |
Derivative financial instruments | (73) |  |  | — |
Total deferred tax liabilities | (862) |  |  | (862) |
Net deferred tax liabilities | $ | (192) |  |  | $ | (119) |
(1)Includes an Italian valuation allowance reversal during Fiscal 2022. (2)Includes a reversal of a Italian brand intangible deferred tax liability. The Company maintains valuation allowances on deferred tax assets applicable to subsidiaries in jurisdictions for which separate income tax returns are filed and where realization of the related deferred tax assets from future profitable operations is not reasonably assured. The valuation allowance decreased $67 million in Fiscal 2022, and increased $24 million and $94 million in Fiscal 2021 and Fiscal 2020, respectively. In certain jurisdictions, the Company increased the valuation allowance by $34 million, $56 million and $113 million and released valuation allowances of $101 million, $32 million and $19 million in Fiscal 2022, Fiscal 2021 and Fiscal 2020, respectively. As of April 2, 2022, the Company had non-United States and United States net operating loss carryforwards of $463 million, a portion of which will begin to expire in Fiscal 2023. As of April 2, 2022 and March 27, 2021, the Company had liabilities related to its uncertain tax positions, including accrued interest, of $221 million and $121 million, respectively, which are included in other long-term liabilities in the Company’s consolidated balance sheets. The total amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate was $206 million, $92 million and $82 million as of April 2, 2022, March 27, 2021 and March 28, 2020, respectively. A reconciliation of the beginning and ending amounts of unrecognized tax benefits, excluding accrued interest, for Fiscal 2022, Fiscal 2021 and Fiscal 2020, are presented below (in millions):
| Fiscal Years Ended |
| April 2, 2022 |  | March 27, 2021 |  | March 28, 2020 |
Unrecognized tax benefits beginning balance | $ | 107 |  |  | $ | 99 |  |  | $ | 192 |  |
Additions related to prior period tax positions | 105 |  | (1) | 12 |  |  | 29 |  |
Additions related to current period tax positions | 29 |  | (2) | 9 |  |  | 4 |  |
Decreases related to audit settlements | (13) |  | (3) | (6) |  |  | (24) |  | (3)
Decreases in prior period positions due to lapses in statute of limitations | (3) |  |  | (4) |  |  | (3) |  |
Decreases related to prior period tax positions | (4) |  |  | (3) |  |  | (99) |  | (4)
Unrecognized tax benefits ending balance | $ | 221 |  |  | $ | 107 |  |  | $ | 99 |  |
(1)Primarily relates to incremental reserves in North America and Europe. (2)Primarily relates to European tax reserves established in Fiscal 2022. (3)Primarily relates to the effective settlement of a United States audit. (4)Primarily relates to releases of North American and European tax reserves. The Company classifies interest and penalties related to unrecognized tax benefits as components of the provision for income taxes. Interest and penalties recognized in the consolidated statements of operations and comprehensive income (loss) for Fiscal 2022, Fiscal 2021 and Fiscal 2020 was $28 million, $15 million and $11 million, respectively. The total amount of unrecognized tax benefits relating to the Company’s tax positions is subject to change based on future events including, but not limited to, the settlement of ongoing tax audits and assessments and the expiration of applicable statutes of limitations. The Company anticipates that the balance of gross unrecognized tax benefits, excluding interest and penalties, will be reduced by $52 million during the next 12 months, primarily due to the anticipated settlement of tax examinations as well as statute of limitation expirations. However, the outcomes and timing of such events are highly uncertain and changes in the occurrence, expected outcomes and timing of such events could cause the Company’s current estimate to change materially in the future. The Company files income tax returns in the United States and in various foreign, state and local jurisdictions. Most examinations have been completed by tax authorities or the statute of limitations has expired for United States federal, foreign, state and local income tax returns filed by the Company for years through Fiscal 2016. Prior to the enactment of the Tax Cuts and Jobs Act (“Tax Act”), the Company’s undistributed foreign earnings were considered permanently reinvested and, as such, United States federal and state income taxes were not previously recorded on these earnings. As a result of the Tax Act, substantially all of the Company’s earnings in foreign subsidiaries generated prior to the enactment of the Tax Act were deemed to have been repatriated. It remains the Company’s intent to either reinvest indefinitely substantially all of its foreign earnings outside of the United States or repatriate them tax neutrally. However, if future earnings are repatriated, the potential exists that the Company may be required to accrue and pay additional taxes, including any applicable foreign withholding tax and income taxes. It is not practicable to estimate the amount of tax that might be payable if these earnings were repatriated due to the complexities associated with the hypothetical calculation. Cares Act On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) was signed into law in response to the COVID-19 pandemic. The CARES Act contains numerous income tax provisions, such as refundable payroll tax credits, deferral of the employer portion of certain payroll taxes, net operating loss carrybacks, modifications to net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property. The CARES Act requires the Company to make significant judgments and estimates in the interpretation of the law and in the calculation of the provision for income taxes. However, additional guidance may be issued by the Internal Revenue Service (“IRS”), the Department of the Treasury or other governing body that may significantly differ from our interpretation of the law, which may result in a material effect on our business, cash flow, results of operations, or financial conditions.

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- 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
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