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Income Taxes
6 Months Ended
Dec. 28, 2013
Income Taxes [Abstract]  
Income Taxes [Text Block]
INCOME TAXES

The effective tax rate for the three months ended December 28, 2013 was a benefit of 23.9% on a net loss reported in the period. For the comparable three month period ended December 29, 2012, the effective tax rate on income was 27.1%. The effective tax rates on income for the six months ended December 28, 2013 and December 29, 2012 were 42.7% and 26.1%, respectively. The effective tax rates for the three and six month periods ended December 28, 2013 were impacted by the transaction costs, changes to the estimated jurisdictional mix of income and the new corporate structure attributable to the acquisition of Elan. Additionally, the effective tax rate for the first six months of fiscal 2014 was unfavorably impacted by Israel tax rate changes in the amounts of $1.8 million and favorably impacted by United Kingdom tax rate changes in the amount of $4.7 million as discussed further below. The effective tax rate for the first six months of fiscal 2013 was favorably affected by a reduction in the reserves for uncertain tax liabilities, recorded in accordance with ASC Topic 740 "Income Taxes", in the amount of $7.5 million related to various audit resolutions and statute expirations.
In fiscal 2011, Israel enacted new tax legislation that reduced the effective tax rate to 10% for 2011 and 2012, 7% for 2013 and 2014, and 6% thereafter for certain qualifying entities that elect to be taxed under the new legislation. This legislation was rescinded as announced in the Official Gazette on August 5, 2013. The new legislation enacted a 9% rate for certain qualifying entities that elect to be taxed under the new legislation. The Company has two entities that had previously elected the new tax legislation for years after fiscal 2011. For all other entities that do not qualify for this reduced rate, the tax rate has been increased from 25% to 26.5%. These rates were applicable to Perrigo for the six months ended December 28, 2013 and have unfavorably impacted the effective tax rate in the amount of $1.8 million.
In July 2013, the United Kingdom passed legislation reducing the statutory rate to 21% and 20% effective April 1, 2014 and April 1, 2015, respectively. These rates were applicable to Perrigo for the six months ended December 28, 2013 and have favorably impacted the effective tax rate in the amount of $4.7 million.
In December 2013, Mexico enacted legislation to rescind the scheduled rate reductions and maintain the 30% corporate tax rate for 2014 and future years. This rate is applicable to Perrigo as of the third quarter of fiscal 2014 and is not expected to have a material impact.
The Company's tax rate is subject to adjustment over the balance of the fiscal year due to, among other things, income tax rate changes by governments; the jurisdictions in which the Company's profits are determined to be earned and taxed; changes in the valuation of the Company's deferred tax assets and liabilities; adjustments to estimated taxes upon finalization of various tax returns; adjustments to the Company's interpretation of transfer pricing standards, changes in available tax credits, grants and other incentives; changes in stock-based compensation expense; changes in tax laws or the interpretation of such tax laws (for example, proposals for fundamental U.S. international tax reform); changes in U.S. generally accepted accounting principles; expiration or the inability to renew tax rulings or tax holiday incentives; and the repatriation of earnings with respect to which the Company has not previously provided for taxes.
The total amount of unrecognized tax benefits was $148.7 million and $122.3 million as of December 28, 2013 and June 29, 2013, respectively.
The total amount accrued for interest and penalties in the liability for uncertain tax positions was $31.3 million and $24.3 million as of December 28, 2013 and June 29, 2013, respectively.