The table below sets forth our (loss) income before taxes for the years ended December 31:

The table below sets forth the components of our income tax provision (benefit) for the years ended December 31:

	2019		2018			2017
Current tax provision
Federal	$	259	$	-		$	-
Foreign		28,829		42,726			31,820
State		92		24			7
		29,180		42,750			31,827
Deferred tax provision (benefit)
Federal		886		2,400			30,186
Foreign		11,994		(3,107	)		(2,352	)
State		30		56			(8	)
		12,910		(651	)		27,826

Liability for unrecognized tax benefits		2,041		2,457			2,672
Total income tax provision	$	44,131	$	44,556		$	62,325

The table below sets forth a reconciliation between the effective tax rate and the statutory tax rates for the years ended December 31:

	2019						2018						2017
				Percent						Percent						Percent
				of pretax						of pretax						of pretax
	Amount			earnings*			Amount			earnings*			Amount			earnings*
Federal tax	$	41,632			21.0		$	31,488			21.0		$	21,907			35.0
State income taxes, net of federal tax provision		1,389			0.7			(375	)		(0.3	)		(15	)		-
Foreign income taxed at lower tax rates		(5,786	)		(2.9	)		(2,844	)		(1.9	)		(23,515	)		(37.6	)
U.S. tax impact of foreign operations		(3,340	)		(1.7	)		4,140			2.8			6,726			10.7
Foreign withholding taxes		22,685			11.4			10,962			7.3			4,343			6.9
Research and development		(3,686	)		(1.9	)		(3,541	)		(2.4	)		(2,643	)		(4.2	)
Liability for unrecognized tax benefits		2,041			1.0			2,457			1.6			2,672			4.3
Valuation allowance		(10,563	)		(5.3	)		(379	)		(0.3	)		2,077			3.3
Employee stock-based compensation		(52	)		(0.0	)		(2,154	)		(1.4	)		1,537			2.5
U.S. Tax Cuts and Jobs Act		-			-			2,762			1.8			45,908			73.4
Other		(189	)		(0.1	)		2,040			1.4			3,328			5.3
Income tax provision	$	44,131			22.3		$	44,556			29.7		$	62,325			99.6

In accordance with the provisions related to accounting for uncertainty in income taxes, we recognize the benefit of a tax position if the position is “more likely than not” to prevail upon examination by the relevant tax authority. The table below sets forth a reconciliation of the beginning and ending amount of unrecognized tax benefits:

	2019			2018			2017
Balance at January 1,	$	32,209		$	30,581		$	28,849
Additions based on tax positions related to the current year		9,274			4,667			3,492
Additions for prior year tax positions		39			-			863
Reductions for prior year tax positions		(5,870	)		(3,039	)		(2,623	)
Balance at December 31,	$	35,652		$	32,209		$	30,581

If the $35.7 million of unrecognized tax benefits as of December 31, 2019, is recognized, approximately $33.5 million would affect the effective tax rate. It is reasonably possible that the amount of the unrecognized benefit with respect to certain of our unrecognized tax positions will significantly increase or decrease within the next 12 months. These changes may be the result of settlements of ongoing audits or competent authority proceedings. At this time, an estimate of the range of the reasonably possible outcomes cannot be made.

We file income tax returns in the U.S. federal jurisdiction and in various state and foreign jurisdictions. We are no longer subject to U.S. federal income tax examinations by tax authorities for tax years before 2012 or tax year 2015. We are no longer subject to China income tax examinations by tax authorities for tax years before 2009. With respect to state and local jurisdictions and countries outside of the U.S., with limited exceptions, we are no longer subject to income tax audits for years before 2014. Although the outcome of tax audits is always uncertain, we believe that adequate amounts of tax, interest and penalties, if any, have been provided for in our reserve for any adjustments that may result from future tax audits. We recognize accrued interest and penalties, if any, related to unrecognized tax benefits in interest expense. We had an immaterial amount of accrued interest and penalties at December 31, 2019, 2018 and 2017.

The table below sets forth our deferred tax assets and liabilities as of December 31:

	2019			2018
Deferred tax assets
Inventory cost	$	10,423		$	7,974
Accrued expenses and accounts receivable		4,420			1,866
Foreign tax credits		5,848			17,600
Research and development tax credits		16,263			15,456
Net operating loss carryforwards		24,139			9,635
Lease obligations		3,773			-
Accrued pension		4,629			4,294
Share based compensation and others		7,805			9,972
		77,300			66,797
Valuation allowances		(29,414	)		(25,941	)
Total deferred tax assets, non-current		47,886			40,856
Deferred tax liabilities
Plant, equipment and intangible assets		(13,816	)		(16,661	)
Right of use assets		(4,008	)		-
Outside basis differences and others		(23,648	)		(7,267	)
Total deferred tax liabilities, non-current		(41,472	)		(23,928	)
Net deferred tax assets	$	6,414		$	16,928

ASU No. 2013-11 provides that an entity is required to present an unrecognized tax benefit, or a portion of an unrecognized tax benefit, in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. The $1.2 million net deferred tax assets presented in the balance sheet as of December 31, 2019, is net of $5.2 million of unrecognized tax benefits. The $6.4 million and $16.9 million net deferred tax asset presented above for December 31, 2019 and 2018, respectively, is prior to the net balance sheet presentation required by ASU 2013-11.

At December 31, 2019, we had federal and state tax credit and research credit carryforwards of approximately $14 million and $8 million, respectively, which are available to offset future income tax liabilities. The federal tax credit carryforwards begin to expire in 2023 and the state tax credit carryforwards will begin to expire in 2020. Consistent with prior years, we determined that it is more likely than not that our state research credit carryforwards will expire before they are utilized. During 2019 we determined that it is more likely than not that our federal tax credit carryforwards will be utilized before expiration. We released the previously recorded valuation allowances as a credit to income tax expense. The valuation allowances recorded against the related deferred tax assets totaled $8 million and $19 million as of December 31, 2019 and 2018, respectively.

At December 31, 2019, we had state net operating loss (“NOL”) carryforwards of approximately $1 million, and foreign NOL carryforwards of $110 million which are available to offset future taxable income. The state NOL carryforward will begin to expire in 2020. We determined that it is more likely than not that the state NOL carryforwards will expire before they are fully utilized and recorded a full valuation allowance on the related deferred tax assets. The foreign NOL carryforwards will begin to expire in 2020. We determined that it is more likely than not that a portion of the foreign NOL carryforwards will expire before they are fully utilized. The valuation allowances recorded against the related deferred tax assets totaled $19 million and $7 million as of December 31, 2019 and 2018, respectively.

Our undistributed foreign earnings continue to be indefinitely reinvested in foreign operations, with limited exceptions related to earnings of European and Asian subsidiaries. As of December 31, 2019, we had undistributed earnings from non-U.S. operations of approximately $913 million (including approximately $115 million of restricted earnings, which are not available for dividends). Undistributed earnings of our China subsidiaries comprise $425 million of this total. Additional Chinese withholding taxes of approximately $46 million would be required should the $425 million of such earnings be distributed out of China as dividends.

The impact of tax holidays decreased our tax expense by approximately $3.1 million, $1.6 million and $3.7 million for the years ended December 31, 2019, 2018 and 2017, respectively. The benefit of the tax holidays on basic and diluted earnings per share was $0.06, $0.03 and $0.08 for the twelve months ended December 31, 2019, 2018 and 2017, respectively.