INCOME TAXES

Income before provision for income taxes included income from domestic operations and income from foreign operations based on geographic location as disclosed in the table below:



	For the Years Ended December 31,
	2016			2015			2014
Income/ (loss) before income tax expense:
Domestic	$	(9,300	)	$	(7,687	)	$	(7,229	)
Foreign	135,766			113,757			94,182
Total	$	126,466		$	106,070		$	86,953

The provision for income taxes consists of the following:



	For the Years Ended December 31,
	2016			2015			2014
Income tax expense (benefit) consists of:
Current
Federal	$	13,324		$	19,851		$	7,741
State	(63		)	2,563			338
Foreign	17,243			14,528			12,504
Deferred
Federal	(3,581		)	(13,361		)	(3,979		)
State	312			(1,891		)	(43		)
Foreign	(35		)	(76		)	751
Total	$	27,200		$	21,614		$	17,312

Deferred Income Taxes

Deferred income taxes reflect the net 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 and liabilities are as follows:



	December 31, 2016		December 31, 2015
Deferred tax assets:
Property and equipment	$	203	$	681
Intangible assets	1,525		1,428
Accrued expenses	9,172		10,729
Net operating loss carryforward	5,368		5,233
Deferred revenue	1,165		2,162
Stock-based compensation	19,701		12,484
Other assets	17		14
Deferred tax assets	37,151		32,731
Deferred tax liabilities:
Property and equipment	1,735		646
Intangible assets	4,969		1,598
Accrued revenue and expenses	500		511
Stock-based compensation	1,606		1,672
Other liabilities	314		912
Deferred tax liabilities	9,124		5,339
Net deferred tax assets	$	28,027	$	27,392

Included in the stock-based compensation expense deferred tax asset at December 31, 2016 and 2015 is $11,471 and $7,219, respectively that is related to acquisitions and is amortized for tax purposes over a 15-year period.

We have income tax net operating loss (“NOL”) carryforwards related to several jurisdictions of $20,899. We have recorded a deferred tax asset of $5,368 reflecting the full benefit of $20,899 in loss carryforwards as we fully expect to utilize all NOLs before each country’s expiration period.

Adoption of ASU 2015-17 resulted in the classification of current deferred tax assets and liabilities to non-current deferred tax assets and liabilities. As such the Company has no current deferred tax assets and liabilities as of December 31, 2016. As of December 31, 2016, the Company had non-current deferred tax assets and liabilities of $31,005 and $2,979, respectively. At December 31, 2015, the Company had current and non-current deferred tax assets of $11,847 and $18,312, respectively, and current and non-current deferred tax liabilities of $365 and $2,402, respectively. Current and non-current deferred tax liabilities were shown under other current and long-term liabilities on the consolidated balance sheets.

No provision has been made for U.S. or non-U.S. income taxes on the undistributed earnings of subsidiaries or for unrecognized deferred tax liabilities for temporary differences related to basis differences in investments in subsidiaries, as such earnings are expected to be permanently reinvested, the investments are essentially permanent in duration, or the Company has concluded that no additional tax liability will arise as a result of the distribution of such earnings. As of December 31, 2016, certain subsidiaries had approximately $571.4 million of undistributed earnings that we intend to permanently reinvest. A liability could arise if our intention to permanently reinvest such earnings were to change and amounts are distributed by such subsidiaries or if such subsidiaries are ultimately disposed. It is not practicable to estimate the additional income taxes related to permanently reinvested earnings or the basis differences related to investments in subsidiaries.

The reconciliation of the federal statutory income tax rate to our effective income tax rate is as follows:



	For the Years Ended December 31,
	2016			2015			2014
Statutory federal tax	$	44,263		$	37,125		$	29,564
Increase/ (decrease) in taxes resulting from:
State taxes, net of federal benefit	1,192			341			311
Provision adjustment for current year uncertain tax position	—			—			(1,220		)
Effect of permanent differences	5,042			7,314			8,589
Stock-based compensationexpense	9,535			7,591			3,782
Foreign tax expense and tax rate differential	(33,477		)	(31,094		)	(24,772		)
Change in foreign tax rate	—			9			754
Change in valuation allowance	—			—			149
Other	645			328			155
Provision for income taxes	$	27,200		$	21,614		$	17,312

On September 22, 2005, the president of Belarus signed the decree “On the High-Technologies Park” (the “Decree”). The Decree is aimed at boosting the country’s high-technology sector. The Decree stipulates that member technology companies have a 100% exemption from Belarusian income tax of 18% effective July 1, 2006, for a period of 15 years. The aggregate dollar benefits derived from this tax holiday approximated $13.6 million, $20.8 million and $16.8 million for the years ended December 31, 2016, 2015 and 2014, respectively. The benefit the tax holiday had on diluted net income per share approximated $0.26, $0.40 and $0.34 for the years ended December 31, 2016, 2015 and 2014, respectively.

Uncertain Tax Positions

The liability for unrecognized tax benefits is included in taxes payable within the consolidated balance sheets at December 31, 2016 and 2015. At December 31, 2016 and 2015, the total amount of gross unrecognized tax benefits (excluding the federal benefit received from state tax positions) was $66 and $62, respectively. These amounts represent the amount of unrecognized tax benefits that, if recognized, would favorably affect the effective tax rate in future periods.

The Company’s policy is to recognize interest and penalties related to uncertain tax positions as a component of its provision for income taxes. There was no accrued interest and penalties resulting from such unrecognized tax benefits at December 31, 2016 and December 31, 2015. The total amount of accrued interest and penalties resulting from such unrecognized tax benefits was $12 at December 31, 2014.

The beginning to ending reconciliation of the gross unrecognized tax benefits is as follows:



	For the Years Ended December 31,
	2016		2015			2014
Balance at January 1	$	62	$	200		$	1,271
Increases in tax positions in current year	4		—			—
Increases in tax positions in prior year	—		—			—
Decreases due to settlement	—		(138		)	(1,071		)
Balance at December 31	$	66	$	62		$	200

There were no tax positions for which it was reasonably possible that unrecognized tax benefits will significantly increase or decrease within twelve months of the reporting date.

The Company files income tax returns in the United States and in various state, local and foreign jurisdictions. The Company’s significant tax jurisdictions are the United States, Canada, Russia, Denmark, Germany, Ukraine, the United Kingdom, Hungary, Switzerland, and India. The tax years subsequent to 2012 remain open to examination by the Internal Revenue Service and generally, the tax years subsequent to 2012 remain open to examination by various state and local taxing authorities and various foreign taxing authorities.