Income Tax

The components of income tax expense for the three months ended March 31, 2017 and 2016, respectively, consisted of the following:



	Three months ended March 31,
(Dollar amounts in thousands)	2017			2016
Current tax provision	$	3,507		$	2,680
Deferred tax benefit	(1,487		)	(804		)
Income tax expense	$	2,020		$	1,876

The Company conducts operations in Puerto Rico and certain countries in Latin America. As a result, the income tax expense includes the effect of taxes paid to the Puerto Rico government as well as foreign jurisdictions. The following table presents the components of income tax expense for the three months ended March 31, 2017 and 2016, respectively, and its segregation based on location of operations:



	Three months ended March 31,
(Dollar amounts in thousands)	2017			2016
Current tax provision (benefit)
Puerto Rico	$	1,806		$	1,766
United States	(186		)	164
Foreign countries	1,887			750
Total current tax provision	$	3,507		$	2,680
Deferred tax benefit
Puerto Rico	$	(589	)	$	(479	)
United States	(103		)	(25		)
Foreign countries	(795		)	(300		)
Total deferred tax benefit	$	(1,487	)	$	(804	)

Taxes payable to foreign countries by EVERTEC’s subsidiaries will be paid by such subsidiary and the corresponding liability and expense will be presented in EVERTEC’s consolidated financial statements.

As of March 31, 2017, the gross deferred tax asset amounted to $5.7 million and the gross deferred tax liability amounted to $19.4 million, compared to $5.0 million and $19.2 million as of December 31, 2016.

The Company estimates that it is reasonably possible that the potential liability for uncertain tax positions relating to the net operating loss created by previously deducted transaction costs will decrease by no more than $4.5 million in the next twelve months as a result of the expiration of the statute of limitations.

Pursuant to the provision of the PR Code, net operating losses (“NOL”) can be carried forward for a period of seven, ten or twelve taxable years, depending on the taxable year generated. Act 72 of May 29, 2015, limited the amount of a NOL deduction to 80% for regular tax and 70% for AMT. At March 31, 2017, the Company has $13.2 million in NOL carryforwards for tax purposes available to offset future taxable income.