Note 15 - Income Taxes

6 Months Ended

Nov. 30, 2015

15.	INCOME TAXES

The effective tax rate for the six months ended November 30, 2015 and November 30, 2014 was 21.4% and 35.4%, respectively. The difference between the federal statutory rate and the effective tax rate for the six months ended November 30, 2015 and November 30, 2014 was primarily due to income subject to tax in the various tax jurisdictions with rates that differ from the U.S. statutory tax rate and the impact of recording U.S. income taxes associated with future remittances of un

repatriated foreign earnings.

In addition, during the third quarter of fiscal 2015, the Company changed its election with regard to the treatment of its foreign tax credits. As a result, the fiscal year 2016 effective tax rate is lower than the fiscal year 2015 effective tax rate because the Company is using the deduction method for foreign taxes during the first six months of fiscal year 2016 and was using the foreign tax credit method during the first six months of fiscal year 2015.

The Company does not consider itself to be permanently reinvested with respect to its accumulated and un-repatriated earnings of each foreign subsidiary. Accordingly, the Company has provided for deferred taxes on future remittance of the un-repatriated earnings of its foreign subsidiaries. The Company continues to consider its investment in each foreign subsidiary in excess of its accumulated and un-repatriated earnings to be permanently reinvested and thus has not recorded a deferred tax liability on that amount.