Note 7 – Income Tax

The components of income tax expense for the three and six months ended June 30, 2015 and 2014 consisted of the following:


	Three months ended June 30,					Six months ended June 30,
(Dollar amounts in thousands)	2015			2014		2015		2014
Current tax provision	$	2,309		$	964	$	4,355	$	4,553
Deferred tax (benefit) provision		(189	)		998		11		(430	)

Income tax expense	$	2,120		$	1,962	$	4,366	$	4,123

The Company conducts operations in Puerto Rico and certain countries in Latin America. As a result, the income tax expense includes the effect of taxes paid to the Puerto Rico government as well as foreign jurisdictions. The following table presents the components of income tax expense for the three and six months ended June 30, 2015 and 2014 and its segregation based on location of operations:


	Three months ended June 30,						Six months ended June 30,
(Dollar amounts in thousands)	2015			2014			2015			2014
Current tax provision
Puerto Rico	$	1,367		$	423		$	2,522		$	1,360
United States		160			217			301			415
Foreign countries		782			324			1,532			2,778

Total currrent tax provision	$	2,309		$	964		$	4,355		$	4,553


Deferred tax (benefit) provision
Puerto Rico	$	111		$	805		$	410		$	832
United States		(32	)		(2	)		(58	)		(3	)
Foreign countries		(268	)		195			(341	)		(1,259	)

Total deferred tax (benefit) provision	$	(189	)	$	998		$	11		$	(430	)

Taxes payable to foreign countries by EVERTEC’s subsidiaries will be paid by such subsidiary and the corresponding liability and expense will be presented in EVERTEC’s consolidated financial statements.

As of June 30, 2015, the gross deferred tax asset amounted to $8.3 million and the gross deferred tax liability amounted to $25.4 million, compared with $9.7 million and $26.8 million as of December 31, 2014. At June 30, 2015, the recorded value of the Company’s net operating loss (“NOL”) carryforwards was $5.2 million. The recorded value of the NOL carryforwards is approximately $4.2 million lower than the total NOL carryforwards available because of a windfall tax benefit. The windfall tax benefit is available to offset future taxable income and is considered an off-balance sheet item until the deduction reduces taxes payable. This windfall tax benefit results from tax deductions that were in excess of previously recorded compensation expense because the fair value of stock options at the time they were granted differed from their fair value when they were exercised. The total gross NOL carryforwards available, including the windfall benefit, amounted to $24.0 million as of June 30, 2015.

There are no open uncertain tax positions as of June 30, 2015.