NOTE 15. INCOME TAXES

As a result of the Merger described in Note 3, TechnipFMC plc is a public limited company incorporated under the laws of England and Wales. Therefore, our earnings are subject to the United Kingdom statutory rate of 19.3% beginning on the effective date of the Merger. Previously these earnings were subject to the French statutory rate of 34.4%. Our consolidated effective income tax rate information has been presented accordingly. The Merger transaction was generally a non-taxable event for the significant jurisdictions in which we operate.

Our income tax provision (benefit) for the three months ended March 31, 2017 and 2016, reflected effective tax rates of 141.5% (as restated) and 27.6% (as restated), respectively. The year-over-year increase in the effective tax rate was primarily due to a change in the forecasted country mix of earnings and valuation allowances due to additional losses generated for which no tax benefit is expected to be realized. In addition, individual tax items, combined with lower profitability in the current period, had a greater impact on the effective rate in the three months ended March 31, 2017 as a result of lower earnings as compared to the same period in 2016.

The effective income tax rate was different from the statutory income tax rate due to the following:


	Three Months Ended March 31,
(In millions)	2017			2016
	As Restated			As Restated
Statutory income tax rate		19.3	%		34.4	%
Net difference resulting from:
Foreign earnings subject to different tax rates		14.8	%		(11.7)	%
Branch profits tax		8.5	%		—	%
Deemed dividends		9.6	%		—	%
State, local and provincial taxes		23.2	%		2.6	%
Return to provision		10.4	%		(4.9)	%
Valuation allowance		51.4	%		12.0	%
Other		4.5	%		(4.8)	%

Effective tax rate		141.5	%		27.6	%