CORRESP 1 filename1.htm CORRESP
MINTZ LEVIN

Daniel H. Follansbee | 617 348 4474 | dhfollansbee@mintz.com

One Financial Center
Boston, MA 02111
617-542-6000
617-542-2241 fax
www.mintz.com






August 24, 2015
VIA EDGAR SUBMISSION
Securities and Exchange Commission
Division of Corporation Finance
100 F Street, N.E.
Washington, D.C. 20549
Attention: Sharon Blume, Accounting Branch Chief
Re:
QIAGEN N.V.
Form 20-F for the Year Ended December 31, 2014
Filed on March 2, 2015
File Number: 000-28564
Ladies and Gentlemen:
On behalf of QIAGEN N.V. (the “Company”), we are hereby filing with the Securities and Exchange Commission (the “Commission”) this letter in response to the comment contained in the letter dated August 13, 2015 from Sharon Blume, the Commission’s Accounting Branch Chief (the “Staff”) to Roland Sackers, the Company's Chief Financial Officer. The comment and response set forth below is keyed to the numbering of the comment and the headings used in the Staff's letter and are based upon information provided to Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. by the Company.
On behalf of the Company, we advise you as follows:
Form 20-F for the Fiscal Year Ended December 31, 2014
Notes to Consolidated Financial Statements
16. Income Taxes, page F-34

1.
Comment: Please provide us proposed disclosure to be included in future periodic reports that details what the line item tax impact exempt income represents in rate reconciliation and what countries it relates to.

Response: The Company acknowledges the Staff’s comment seeking expanded detail underlying the line item labelled “tax impact from exempt income.”  In addition to income which is fully exempt from any tax, included in this line item are amounts relating to foreign source income or loss in different jurisdictions that are either taxed at rates higher or lower than the statutory rates or for which the income is partially exempt due to specific


Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
BOSTON | LONDON | LOS ANGELES | NEW YORK | SAN DIEGO | SAN FRANCISCO | STAMFORD | WASHINGTON


Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

Securities and Exchange Commission
August 24, 2015
Page 2




regulations in the respective jurisdiction. Further, the amount included certain deductions, such as those related to the United States IRC 199 for manufacturing deductions. The countries to which these amounts relate to are primarily the United States, Germany and Luxembourg.

Accordingly, based on an in-depth review following the Staff’s comment, we propose to include in future periodic reports:
•
the tax benefit only from income which is fully exempt on the line labelled “tax impact from exempt income.” This amount is due to fully non-taxable income primarily in the Netherlands;

•
the tax benefit of foreign source income or loss subject to tax at a rate higher or lower than the statutory rate or that is partially exempt due to various intercompany operating and financing activities, is presented together with amounts from subsidiaries taxed at different rates and renamed in a new separate line labelled “Taxation of foreign operations, net.” The tax benefits from foreign operations were primarily from the Company’s earnings in the United States, Germany and Luxembourg; and

•
for the tax benefit of certain government incentives including the United States IRC 199 manufacturing deduction, a new separate line labelled “Government incentives and other deductions,” which also includes the amounts for French and United States government incentives related to research and development.

The Company has carefully considered the Staff’s comment and proposes to expand its disclosure in future filings as marked below based on the Company’s 2014 disclosure.

■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■
16. Income Taxes
Income before provision for income taxes for the years ended December 31, 2014, 2013 and 2012 consisted of:
(in thousands)
2014
 
2013
 
2012
Pretax income in The Netherlands
$
(5,806
)
 
$
24,135

 
$
27,222

Pretax income from foreign operations
124,320

 
13,203

 
117,931

 
$
118,514

 
$
37,338

 
$
145,153




Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
BOSTON | LONDON | LOS ANGELES | NEW YORK | SAN DIEGO | SAN FRANCISCO | STAMFORD | WASHINGTON


Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

Securities and Exchange Commission
August 24, 2015
Page 3




The provisions for income taxes for the years ended December 31, 2014, 2013 and 2012 are as follows:
(in thousands)
2014
 
2013
 
2012
Current—The Netherlands
$
936

 
$
2,874

 
$
3,271

—Foreign
41,667

 
33,452

 
35,112

 
42,603

 
36,326

 
38,383

Deferred—The Netherlands
317

 
—

 
—

—Foreign
(41,608
)
 
(68,086
)
 
(22,767
)
 
(41,291
)
 
(68,086
)
 
(22,767
)
Total provision for income taxes
$
1,312

 
$
(31,760
)
 
$
15,616


The Netherlands statutory income tax rate was 25% for the years ended December 31, 2014, 2013 and 2012. The principal items comprising the differences between income taxes computed at the Netherlands statutory rate and the effective tax rate for the years ended December 31, 2014, 2013 and 2012 are as follows:
 
2014
 
2013
 
2012
(in thousands)
Amount
 
Percent
 
Amount
 
Percent
 
Amount
 
Percent
Income taxes at The Netherlands statutory rate
$
29,628

 
25.0
 %
 
9,334

 
25.0
 %
 
$
36,288

 
25.0
 %
Earnings of subsidiaries taxed at different rates Taxation of foreign operations, net (1)
(29,959
)
 
(25.3
)
 
(31,826
)
 
(85.2
)
 
(20,687
)
 
(14.3
)
Tax impact from permanent items
9,339

 
7.9

 
6,219

 
16.7

 
4,854

 
3.4

Tax impact from tax exempt income (2)
(2,589
)
 
(2.1
)
 
(8,557
)
 
(23.0
)
 
(8,297
)
 
(5.7
)
Tax contingencies, net
4,409

 
3.7

 
1,986

 
5.3

 
2,729

 
1.9

Taxes due to changes in tax rates
330

 
0.3

 
(1,640
)
 
(4.4
)
 
(1,086
)
 
(0.8
)
Taxes due to changes in tax laws
—

 
—

 
—

 
—

 
2,697

 
1.9

Research and development Government incentives and other deductions (3)
(8,617
)
 
(7.3
)
 
(5,931
)
 
(15.9
)
 
(3,986
)
 
(2.7
)
Restructuring
—

 
—

 
(872
)
 
(2.3
)
 
—

 
—

Prior year taxes
(1,950
)
 
(1.7
)
 
(888
)
 
(2.4
)
 
2,805

 
1.9

Other items, net
721

 
0.6

 
415

 
1.1

 
299

 
0.2

Total provision for income taxes
$
1,312

 
1.1
 %
 
$
(31,760
)
 
(85.1
)%
 
$
15,616

 
10.8
 %

(1) Our effective tax rate reflects the benefit of our global operations where certain income or loss is taxed at rates higher or lower than the statutory Netherlands rate of 25% as well as the benefit of some income being partially exempt from income taxes due to various intercompany operating and financing activities. The most significant tax benefits from these activities were from the Company’s activities in the United States, Germany and Luxembourg.
(2) The tax impact from exempt income primarily reflects the Netherlands benefit of the 2006 and 2004 Notes discussed in Note 15 “Lines of Credit and Debt.” These notes were redeemed in 2014 and 2015, respectively, and accordingly the related income tax benefit of $2.6 million in 2014 and $4.6 million in 2013, will not continue to impact our future effective tax rate.
(3) Government incentives include favorable tax regulations primarily in France and the United States relating to research and development expense as well as the United States IRC Section 199 Domestic Manufacturing Deduction.



Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
BOSTON | LONDON | LOS ANGELES | NEW YORK | SAN DIEGO | SAN FRANCISCO | STAMFORD | WASHINGTON


Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

Securities and Exchange Commission
August 24, 2015
Page 4




[Remainder of the footnote unchanged]

As requested, this response letter has been filed on EDGAR under the form type CORRESP. The Company understands that the Commission may have additional comments after reviewing this letter.
In addition, as requested by the Staff, the Company acknowledges that:
•
The Company is responsible for the adequacy and accuracy of the disclosure in the filing;
•
Staff comments or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the filing; and
•
The Company may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

We hope that the above responses will be acceptable to the Staff. If you have any questions or comments regarding the foregoing, kindly contact the undersigned at (617) 348-4474. Thank you for your time and attention.

Very truly yours,

/s/ Daniel H. Follansbee
Daniel H. Follansbee


cc: QIAGEN N.V.
Roland Sackers, Chief Financial Officer
Susan Stefanelli, Senior Director SEC Reporting
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
Jonathan L. Kravetz, Esq.



Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
BOSTON | LONDON | LOS ANGELES | NEW YORK | SAN DIEGO | SAN FRANCISCO | STAMFORD | WASHINGTON