(11) Income Taxes

As of December 31, 2013 and 2012, interest and penalties related to any uncertain tax positions have been insignificant. The Company recognizes interest and penalties related to uncertain tax positions within the provision for income taxes. The total amount of unrecognized tax benefits that would affect the Company’s effective tax rate if recognized is $1.7 million as of December 31, 2013, as compared to $1.2 million as of December 31, 2012.

The following is a reconciliation of the total amounts of unrecognized tax benefits for the years ended December 31, 2013, 2012 and 2011:


	2013			2012			2011
	(In thousands)
Beginning uncertain tax benefits	$	1,243		$	997		$	558
Current year—increases		687			294			439
Current year—decreases		(256	)		(48	)		—

Ending uncertain tax benefits	$	1,674		$	1,243		$	997

The Company files income tax returns in the U.S., Ireland and United Kingdom. The Company remains subject to tax examinations in the following jurisdictions as of December 31, 2013:


Jurisdiction	Tax Years
United States (Federal and State)		2010-2013
Ireland		2008-2013
United Kingdom		2012-2013

The Company expects gross liabilities of $254,000 to expire in 2014 based on statutory lapses.

The components of loss from operations before taxes were as follows at December 31:


	2013			2012			2011
	(In thousands)
United States	$	(9,234	)	$	1,874		$	1,019
Ireland and United Kingdom		(160,187	)		(171,942	)		(67,629	)

	$	(169,421	)	$	(170,068	)	$	(66,610	)

The (benefit) expense from income taxes shown in the accompanying consolidated statements of operations consists of the following for fiscal 2013, 2012 and 2011:


	2013			2012			2011
	(In thousands)
Current:
Federal-U.S.	$	122		$	10,265		$	3,908
State-U.S.		118			2,565			1,101

Total Current	$	240		$	12,830		$	5,009

Deferred:
Federal-U.S.		(4,065	)		(2,803	)		(1,936	)
State-U.S.		631			(911	)		(557	)
Ireland and United Kingdom		(33,106	)		(22,515	)		(5,566	)
Change in valuation allowance		33,106			22,515			5,566

Total Deferred	$	(3,434	)	$	(3,714	)	$	(2,493	)

	$	(3,194	)	$	9,116		$	2,516

The (benefit) expense from income taxes differs from the amount computed by applying the statutory income tax rate to income before taxes due to the following for fiscal 2013, 2012 and 2011:


	2013			2012			2011
	(In thousands)
Benefits from taxes at statutory rate	$	(42,355	)	$	(42,517	)	$	(16,652	)
Rate differential		18,494			13,249			3,952
Change in valuation reserves		33,106			22,515			7,120
Permanent & other		(985	)		6,809			2,209
Warrant derivative liabilities		(11,984	)		8,904			5,643
Other		530			156			244

	$	(3,194	)	$	9,116		$	2,516

The Company is subject to corporate tax rate in Ireland of 25% for non-trading activities and 12.5% for trading activities. For the years ended December 31, 2013, 2012 and 2011, the Company applied the statutory corporate tax rate of 25% for Amarin Corporation plc, reflecting the non-trading tax rate in Ireland. However, for Amarin Pharmaceuticals Ireland Limited, a wholly-owned subsidiary of Amarin Corporation plc, the Company applied the 12.5% Irish trading tax rate.

The income tax effect of each type of temporary difference comprising the net deferred tax asset at December 31 is as follows:


	2013			2012
	(In thousands)
Deferred tax assets:
Net operating losses	$	85,724		$	55,086
Stock based compensation		11,660			9,155
Depreciation		(126	)		(189	)
Tax credits		1,256			5
Other reserves and accrued liabilities		2,900			818

Gross deferred tax asset		101,414			64,875
Less: valuation allowance		(88,999	)		(55,894	)

	$	12,415		$	8,981

The Company assesses whether it is more-likely-than-not that the Company will realize its deferred tax assets. The Company determined that it was more-likely-than-not that the Irish, UK, and Israeli net operating losses and the related deferred tax assets would not be realized in future periods and a full valuation allowance has been provided for all periods.

The Company has combined Irish, UK, and Israeli net operating loss carryforwards of $528.2 million, which do not expire. In addition, the Company has available U.S. Federal tax credit carryforwards of $4.1 million and state tax credit carryforwards of $1.8 million. These carryforwards, which will expire starting between 2029 and 2032 may be used to offset future taxable income, if any.

The Company recognized a tax benefit related to the extension of 2012 research and development credits into 2013 and recorded a discrete benefit of approximately $1.9 million.