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Income Taxes
 9 Months Ended
Sep. 30, 2020
Income Tax Disclosure [Abstract]  
Income Taxes
NOTE 8 – INCOME TAXES
A roll-forward of unrecognized tax benefits and associated accrued interest and penalties is as follows:
 
(in millions)
   
Unrecognized
Tax Benefits
     
Interest and
Penalties
     
Total
  
Opening balance at January 1
    $ 14.4      $ 2.0      $ 16.4  
Net change for tax positions of prior periods
      (1.1 )       0.2        (0.9 ) 
  
 
 
     
 
 
     
 
 
  
Closing balance at September 30
      13.3        2.2        15.5  
Current
      0.0        0.0        0.0  
  
 
 
     
 
 
     
 
 
  
Non-current
    $ 13.3      $ 2.2      $ 15.5  
  
 
 
     
 
 
     
 
 
  
All of the $15.5 million of unrecognized tax benefits, interest and penalties would impact our effective tax rate if recognized.
As previously disclosed, a
non-U.S.
subsidiary, Innospec Performance Chemicals Italia Srl, is subject to an ongoing tax audit in relation to the period 2011 to 2014 inclusive. The Company has determined that additional tax, interest and penalties totaling $3.3 million may arise as a consequence of the tax audit. This includes a reduction in interest accrued of $0.1 million and an increase for foreign exchange movements of $0.1 million recorded in the nine months to September 30, 2020. As any additional tax arising as a consequence of the tax audit would be reimbursed by the previous owner under the terms of the sale and purchase agreement, an indemnification asset of the same amount is recorded in the financial statements to reflect this arrangement.
As previously disclosed, in 2018 the Company recorded an unrecognized tax benefit in relation to a potential adjustment that could arise as a consequence of the Tax Cuts and Jobs Act, but for which retrospective adjustment to the filed 2017 U.S. federal income tax returns was not permissible. The Company has determined that additional tax, interest and penalties totaling $12.2 million may arise in relation to this item. This includes an increase in interest accrued of $0.5 million in the nine months to September 30, 2020.
As previously disclosed, in 2015 the Company recorded an unrecognized tax benefit of $1.2 million in relation to additional tax that could have arisen if a historical impairment in value of certain of the Company’s
non-U.S.
subsidiaries was reversed upon challenge by the tax authorities. The Company released the provision of $1.2 million in full, together with accrued interest of $0.2 million thereon, in the three months ended June 30, 2020, following a review of the value of the Company’s investments that confirmed the historical impairment in value undertaken in 2005 was appropriate.
The Company and its U.S. subsidiaries remain open to examination by the IRS for years 2016 onwards under the statute of limitations. The Company’s subsidiaries in foreign tax jurisdictions are open to examination including Germany (2015 onwards), Switzerland (2015 onwards), Spain (2016 onwards), France (2017 onwards) and the United Kingdom (2018 onwards).