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Income Taxes
 9 Months Ended
Jun. 30, 2022
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The Company’s provision for income taxes is based on the estimated annual effective tax rate, plus discrete items.
Income tax expense was $(1.0) million and $1.7 million for the three months ended June 30, 2022 and 2021, respectively. The effective tax rate for the three months ended June 30, 2022 and 2021 was 1.6% and (4.5)%, respectively. For the three months ended June 30, 2022, the Company’s effective tax rate differs from the U.S. statutory tax rate of 21% primarily due to flow-through losses incurred prior to the IPO on November 1, 2021, flow-through losses attributable to the Founders, valuation allowances, and foreign exchange losses. For the three months ended June 30, 2021, the Company’s effective tax rate differs from the U.S. statutory tax rate primarily due to foreign tax rate differentials, flow through losses attributable to the Founders, valuation allowances recorded on foreign deferred tax assets and foreign withholding taxes on royalties.
Income tax expense was $(0.5) million and $2.9 million for the nine months ended June 30, 2022 and 2021, respectively. The effective tax rate for the nine months ended June 30, 2022 and 2021 was 0.2% and (4.0)%, respectively. For the nine months ended June 30, 2022, the Company’s effective tax rate differs from the U.S. statutory tax rate of 21% primarily due to flow-through losses incurred prior to the IPO on November 1, 2021, flow-through losses attributable to the Founders, valuation allowances, and foreign exchange losses. For the nine months ended June 30, 2021, the Company’s effective tax rate differs from the U.S. statutory tax rate primarily due to foreign tax rate differentials, flow through losses attributable to the Founders, valuation allowances recorded on foreign deferred tax assets and foreign withholding taxes on royalties.
The Company does not believe it has any significant uncertain tax positions and therefore has no unrecognized tax benefits as of June 30, 2022 and September 30, 2021, that if recognized, would affect the annual effective tax rate.
As of June 30, 2022 and September 30, 2021, the Company had recorded a full valuation allowance against deferred tax assets on some of its foreign subsidiaries. Upon the IPO on November 1, 2021, Fluence Energy, Inc. became a holding company of Fluence Energy, LLC, and as a corporation, recorded deferred tax assets primarily related to its investment in the LLC. The Company determined that based on the weight of available evidence, including cumulative losses, it is more-likely-than-not that the net deferred tax assets of Fluence Energy, Inc. and some of Fluence Energy, LLC’s foreign subsidiaries will not be realized and valuation allowances have been recorded against such deferred tax assets.