Income Tax

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Income Tax

10. INCOME TAXES

The components of income (loss) before income tax are as follows (in thousands):

	For the Years Ended December 31,
	2021		2020			2019
United States	$	10,028	$	(45,167	)	$	61,374
Other countries		26,082		(46,010	)		20,620
Income (loss) before income tax	$	36,110	$	(91,177	)	$	81,994

The components of income tax expense (benefit) are as follows (in thousands):

	For the Years Ended December 31,
	2021		2020			2019
Current:
United States	$	1,983	$	5,181		$	8,786
Other countries		6,500		11,926			13,267
State and provincial		699		618			(28	)
Total current		9,182		17,725			22,025
Deferred:
United States		905		(69	)		(57,250	)
Other countries		5,630		(11,144	)		23,558
State and provincial		174		(616	)		(623	)
Total deferred		6,709		(11,829	)		(34,315	)
Income tax expense (benefit)	$	15,891	$	5,896		$	(12,290	)

The differences in income tax expense (benefit) computed using the Netherlands statutory income tax rate of 25% and our income tax expense (benefit) as reported in the accompanying consolidated statements of operations are as follows (in thousands):

	For the Years Ended December 31,
	2021			2020			2019
Tax at the Netherlands income tax rate	$	8,981		$	(23,005	)	$	22,895
International earnings taxed at rates other than the    Netherlands statutory rate		9,403			14,986			(1,343	)
Non-deductible expenses		1,875			2,977			3,516
Change in valuation allowance		1,113			23			(3,491	)
State and provincial taxes		462			(227	)		(825	)
Tax credits		(7,992	)		(5,975	)		(3,893	)
Benefit from corporate restructuring		—			—			(59,336	)
Unremitted earnings of subsidiaries		1,236			418			26,126
Adjustments of prior year taxes		1,320			545			(1,684	)
Adjustments of income tax reserves		(1,345	)		(1,965	)		1,084
Non-deductible goodwill impairment		—			15,547			—
Foreign exchange		(1,168	)		226			2,014
UK tax rate change		(905	)		—			—
Netherlands audit settlement		1,522			—			—
Accrued withholding taxes		1,648			2,092			2,603
Other		(259	)		254			44
Income tax expense (benefit)	$	15,891		$	5,896		$	(12,290	)

Deferred tax assets and liabilities result from various temporary differences between the financial statement carrying amount and their tax basis. Deferred tax assets and liabilities are summarized as follows (in thousands):

	December 31,
	2021			2020
Deferred tax assets:
Net operating loss carry-forwards	$	10,622		$	13,892
Tax credit carry-forwards		4,658			2,996
Accruals for compensation		7,440			8,587
Accruals for inventory capitalization		3,192			3,445
Unrealized benefit from corporate restructuring		49,313			53,501
Intangibles		582			830
Unrealized benefit plan loss		1,974			2,366
Unrealized foreign exchange		2,853			2,852
UK tax rate change		905			—
Unearned revenue		1,024			741
Other		3,860			1,989
Total deferred tax assets		86,423			91,199
Valuation allowance		(7,377	)		(6,264	)
Net deferred tax assets		79,046			84,935
Deferred tax liabilities:
Property, plant and equipment		(4,139	)		(4,998	)
Accrued withholding taxes		(27,544	)		(26,916	)
Unrealized foreign exchange		(1,070	)		(610	)
Other		(167	)		(221	)
Total deferred tax liabilities		(32,920	)		(32,745	)
Net deferred income taxes	$	46,126		$	52,190

	December 31,
	2021			2020
Long-term deferred tax assets	$	70,462		$	72,775
Long-term deferred tax liabilities		(24,336	)		(20,585	)
Total deferred tax assets	$	46,126		$	52,190

At December 31, 2021, we had tax net operating loss carry-forwards in various tax jurisdictions of $49.3 million. Although we cannot be certain that these operating loss carry-forwards will be utilized, we anticipate that we will have sufficient taxable income in future years to allow us to fully utilize the carry-forwards that are not subject to a valuation allowance. As of December 31, 2021, if unused, $0.5 million will expire between 2022 and 2023, $4.5 million will expire between 2024 and 2026, $6.7 million will expire between 2027 and 2030 and $6.5 million will expire beyond 2030. The remaining balance of $31.1 million is not subject to expiration. During 2021, no material net operating loss carry-forwards, which carried a full valuation allowance, expired unused.

We file income tax returns in the U.S. federal jurisdiction, various states and foreign jurisdictions. We are currently undergoing multiple examinations in various jurisdictions, and the years 2011 through 2020 remain open for examination in various tax jurisdictions in which we operate. The ultimate settlement and timing of these additional tax assessments is uncertain but the Company will continue to vigorously defend its return filing position and does not view the assessments as probable at this time.

During 2021, adjustments were made to estimates for uncertain tax positions in certain tax jurisdictions based upon changes in facts and circumstances, resulting in a reduction to the unrecognized tax benefits. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):

	For the Years Ended December 31,
	2021			2020			2019
Unrecognized tax benefits at January 1,	$	6,255		$	7,301		$	7,471
Tax positions, current period		204			1,650			495
Tax positions, prior period		(197	)		(491	)		(361	)
Settlements with taxing authorities		(1,395	)		(2,159	)		(18	)
Lapse of applicable statute of limitations		(540	)		(46	)		(286	)
Unrecognized tax benefits at December 31,	$	4,327		$	6,255		$	7,301

Our policy is to record accrued interest and penalties on uncertain tax positions, net of any tax effect, as part of total tax expense for the period. The corresponding liability is carried along with the tax exposure as a non-current payable in Other Long-term Liabilities. For the years ended December 31, 2021, 2020 and 2019, we recognized $0.3 million, $(0.9) million and $1.3 million, respectively, in interest and penalties. For the years ended December 31, 2021, 2020 and 2019, we had $4.5 million, $4.2 million and $5.1 million, respectively, accrued for the payment of interest and penalties. Changes in our estimate of unrecognized tax benefits would affect our effective tax rate. As of December 31, 2021, 2020 and 2019 there are $0.6 million, $0.5 million and $0.9 million, respectively, of unrecognized tax benefits that could be resolved within the next twelve months which could have a positive effect on the annual effective tax rate.