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Income Taxes | 12 Months Ended
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Jan. 01, 2016
Income Tax Disclosure [Abstract] |
Income Tax Disclosure [Text Block] | Note 9 — Income Taxes The provision (benefit) for income taxes consists of the following (in thousands):
|  | 2015 |  | 2014 |  | 2013 |
Current tax provision: |  |  |  |  |  |  |  |  |  |
U.S. federal (benefit) |  | $ | — |  | $ | 3 |  | $ | (121) |
State |  |  | 12 |  |  | 15 |  |  | 12 |
Foreign |  |  | 443 |  |  | 570 |  |  | 721 |
Total current provision |  |  | 455 |  |  | 588 |  |  | 612 |
Deferred tax provision (benefit): |  |  |  |  |  |  |  |  |  |
U.S. federal and state |  |  | — |  |  | — |  |  | — |
Foreign provision (benefit) |  |  | 473 |  |  | (841) |  |  | 104 |
Total deferred provision (benefit) |  |  | 473 |  |  | (841) |  |  | 104 |
Provision (benefit) for income taxes |  | $ | 928 |  | $ | (253) |  | $ | 716 |
As of January 1, 2016, the Company had federal net operating loss carryforwards of $131.1 million available to reduce future income taxes of its U.S. operations. The federal net operating loss carryforwards expire in varying amounts between 2020 and 2035. In California, the main state from which the Company conducts its domestic operations, the Company has state net operating losses of $45.7 million available to reduce future California income taxes. The California net operating loss carryforwards expire in varying amounts between 2016 and 2035 and, approximately $19.9 million of those net operating loss carryforwards, will expire over the next two years. The Company had accrued net income taxes receivable of $380,000 and $217,000 at January 1, 2016 and January 2, 2015, respectively, primarily due to taxes from foreign jurisdictions. The provision (benefit) for income before taxes differs from the amount computed by applying the statutory federal income tax rate to income before taxes as follows (in thousands):
|  | 2015 |  | 2014 |  | 2013 |
Computed provision (benefit) for taxes based on income at statutory rate |  |  | 34.0 | % | $ | (1,905) |  |  | 34.0 | % | $ | (2,939) |  |  | 34.0 | % | $ | 379 |
Increase (decrease) in taxes resulting from: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Permanent differences |  |  | (0.6) |  |  | 33 |  |  | (0.2) |  |  | 20 |  |  | 3.2 |  |  | 35 |
Federal minimum taxes |  |  | — |  |  | — |  |  | (0.1) |  |  | 3 |  |  | — |  |  | — |
State minimum taxes, net of federal income tax benefit |  |  | (0.1) |  |  | 8 |  |  | (0.1) |  |  | 10 |  |  | 0.7 |  |  | 8 |
Stock options |  |  |  |  |  |  |  |  | — |  |  | — |  |  | — |  |  | — |
State tax benefit |  |  | (6.6) |  |  | 370 |  |  | 4.6 |  |  | (394) |  |  | 6.4 |  |  | 71 |
Tax rate difference due to foreign statutory rate |  |  | 1.6 |  |  | (90) |  |  | 3.3 |  |  | (288) |  |  | 43.7 |  |  | 487 |
Expiration of state net operating tax carryforwards |  |  | (47.3) |  |  | 2,650 |  |  | — |  |  | — |  |  | — |  |  | — |
Foreign earnings not permanently reinvested |  |  | (9.8) |  |  | 547 |  |  | 0.1 |  |  | (11) |  |  | (7.7) |  |  | (86) |
Foreign dividend withholding |  |  | (3.8) |  |  | 211 |  |  | (1.5) |  |  | 132 |  |  | 12.5 |  |  | 140 |
Expiration of charitable contribution carryover |  |  | (0.3) |  |  | 15 |  |  | (0.2) |  |  | 18 |  |  | 0.2 |  |  | 2 |
Reserve |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (10.9) |  |  | (121) |
Other |  |  | 2.5 |  |  | (140) |  |  | 1.0 |  |  | (85) |  |  | 6.4 |  |  | 71 |
Valuation allowance |  |  | 13.8 |  |  | (771) |  |  | (38.0) |  |  | 3,281 |  |  | (24.2) |  |  | (270) |
Effective tax provision (benefit) rate |  |  | (16.6) | % | $ | 928 |  |  | 2.9 | % | $ | (253) |  |  | 64.3 | % | $ | 716 |
The Company recorded an income tax provision of $928,000 during the fiscal year 2015 due to profits generated in its foreign operations. The Company recorded income tax benefits of $0.3 million during fiscal year 2014 principally related to its Swiss operations. The tax benefits were recorded after finalizing ongoing discussions with the Swiss tax authorities, or the STA, in connection with the completion of the Company’s manufacturing consolidation project, which had been in progress since 2012 and completed in June 2014. The discussions included, among other things, the approval of a special Swiss tax ruling available to certain qualified companies doing business in Switzerland as a foreign operator, as defined by the STA. The discussions also included an agreement with the STA to consolidate the financial results of a foreign entity solely for Swiss income tax purposes, previously not taxable by the STA, to become subject to Swiss tax. The Company was advised by the STA during 2014 that it had met the special ruling qualifications for 2014. Included in the state tax provision for 2015 is a decrease to the state deferred tax asset and corresponding decrease to the valuation allowance of $3,020,000 primarily related to the expiration of state net operating loss carryforwards. For 2014 there was an increase to the state deferred tax asset and corresponding increase to the valuation allowance of $394,000. For 2013 there was a decrease to the state deferred tax asset and corresponding decrease to the valuation allowance of $71,000. This results in a total state tax provision of $12,000 for 2015, $15,000 for 2014, and $12,000 for 2013. Included in the deferred foreign tax benefit for 2015 is an increase in foreign deferred liabilities of $172,000. For 2014, there was a decrease in foreign deferred liabilities of $1,039,000. For 2013, there was a decrease to the foreign deferred tax assets of $630,000 and a corresponding decrease to the valuation allowance of $1,008,000. All earnings from the Company’s subsidiaries are not considered to be permanently reinvested. Accordingly, the Company provides withholding and U.S. taxes on all unremitted foreign earnings. During 2015 and 2014 there were no withholding taxes paid to foreign jurisdictions and there were no earnings repatriated from foreign subsidiaries. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred tax assets (liabilities) as of January 1, 2016 and January 2, 2015 are as follows (in thousands):
|  | 2015 |  | 2014 |
Current deferred tax assets (liabilities): |  |  |  |  |  |  |
Allowance for doubtful accounts and sales returns |  | $ | 90 |  | $ | 127 |
Inventories |  |  | 422 |  |  | 511 |
Accrued vacation |  |  | 382 |  |  | 397 |
Accrued other expenses |  |  | 176 |  |  | 119 |
Other |  |  | 57 |  |  | 80 |
Valuation allowance |  |  | (1,058) |  |  | (939) |
Total current deferred tax assets (liabilities) |  | $ | 69 |  | $ | 295 |
Non-current deferred tax assets (liabilities): |  |  |  |  |  |  |
Net operating loss carryforwards |  | $ | 51,005 |  | $ | 53,747 |
Stock-based compensation |  |  | 1,763 |  |  | 1,684 |
Business, foreign and AMT credit carryforwards |  |  | 1,730 |  |  | 1,223 |
Capitalized R&D |  |  | 134 |  |  | 423 |
Contributions |  |  | 17 |  |  | 37 |
Pensions |  |  | 583 |  |  | 489 |
Depreciation and amortization |  |  | 695 |  |  | 870 |
Foreign tax withholding |  |  | (1,627) |  |  | (1,326) |
Foreign earnings not permanently reinvested |  |  | (3,209) |  |  | (5,022) |
Other |  |  | 13 |  |  | 31 |
Valuation allowance |  |  | (52,275) |  |  | (53,165) |
Total non-current deferred tax liabilities |  | $ | (1,171) |  | $ | (1,009) |
As of January 1, 2016, the Company had net deferred tax liabilities in Switzerland of $1,686,000 (which included $1,627,000 of withholding taxes on unremitted foreign earnings) and net deferred tax assets of $584,000 in Japan included in the Company’s components of deferred income tax assets and liabilities table. As of January 2, 2015, the Company had net deferred tax liabilities in Switzerland of $1,371,000 (which included $1,326,000 of withholding taxes on unremitted foreign earnings) and net deferred tax assets of $658,000 in Japan included in the Company’s components of deferred income tax assets and liabilities table. Valuation allowance ASC 740 requires that a valuation allowance be established when it is more likely than not that all or a portion of a deferred tax asset may not be realizable. The Company is subject to income taxes in the U.S. and numerous foreign jurisdictions. In evaluating the Company’s ability to recover the deferred tax assets within a jurisdiction from which they arise, management considers all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax-planning strategies and results of recent operations. In projecting future taxable income, the Company begins with historical results and incorporates assumptions including overall current and projected business and industry conditions, the amount of future federal, state, and foreign pretax operating income, the reversal of temporary differences and the successful implementation of feasible and prudent tax-planning strategies. These assumptions require significant judgment about the forecasts of future taxable income and are consistent with the plans and estimates the Company uses to manage the underlying businesses. In evaluating the objective evidence that historical results provide, the Company considers three years of cumulative operating results. Valuation allowances, or reductions to deferred tax assets, are recognized if, based on the weight of all the available evidence, it is more likely than not that some portion or all of the deferred tax asset may not be realized. U.S. Jurisdiction Due to the Company’s history of losses in the U.S., the valuation allowance fully offsets the value of U.S. deferred tax assets on the Company’s balance sheet as of January 1, 2016. Further, pursuant to the provisions of Internal Revenue Code Section 382, significant changes in ownership may restrict the future utilization of these tax loss carry forwards. Foreign Jurisdictions STAAR Surgical AG Due to STAAR Surgical AG’s history of profits, the deferred tax assets are considered fully realizable. Included in deferred tax assets and liabilities of STAAR AG is noncurrent deferred tax assets of $312,000 and $256,000 as of January 1, 2016 and January 2, 2015, respectively. STAAR Japan, Inc. Since 2012, STAAR Japan functions as a limited-risk distributor with a guaranteed return from STAAR AG and accordingly, STAAR Japan’s deferred tax assets are considered fully realizable. Included in deferred tax assets and liabilities of STAAR Japan is net deferred tax assets of $584,000 (as translated using the Japanese Yen exchange rate on January 1, 2016) and $658,000 as of January 1, 2016 and January 2, 2015, respectively. Other Income Tax Disclosures The following tax years remain subject to examination:
Significant Jurisdictions |  | Open Years |
U.S. Federal |  | 2012 – 2014 |
California |  | 2011 – 2014 |
Switzerland |  | 2014 |
Japan |  | 2012 – 2014 |
Income (loss) from continuing operations before provision (benefit) for income taxes is as follows (in thousands):
|  | 2015 |  | 2014 |  | 2013 |
Domestic |  | $ | (7,678) |  | $ | (8,113) |  | $ | (2,131) |
Foreign |  |  | 2,073 |  |  | (532) |  |  | 3,245 |
|  | $ | (5,605) |  | $ | (8,645) |  | $ | 1,114 |

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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/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 + Details
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