
	2020		2019		2018
Current:
Federal	$	8,779	$	15,160	$	63,814
State	23		—		234
Foreign	12,699		11,943		10,134
	21,501		27,103		74,182
Deferred:
Federal	(6,498)		(3,498)		(2,958)
State	3		827		(447)
Foreign	2,912		(7,093)		23,793
	(3,583)		(9,764)		20,388
	$	17,918	$	17,339	$	94,570

The following is a reconciliation of the federal statutory income tax rate to the effective income tax rates reflected in the Consolidated Statements of Comprehensive Income for fiscal 2020, 2019 and 2018:


	2020		2019		2018
Federal statutory income tax rate	21.0	%	21.0	%	24.5	%
(Decrease) increase resulting from:
Foreign tax rate differences	(24.0)		(21.0)		(30.2)
Withholding tax on dividends	1.9		(5.4)		23.7
Permanent differences	(2.6)		(1.3)		0.8
Excess tax benefits related to share-based compensation	(3.0)		(1.3)		(2.7)
Global intangible low-taxed income ("GILTI")	13.8		11.7		—
Deemed repatriation tax	—		5.6		92.2
Non-deductible compensation	2.2		1.5		0.2
Valuation allowances	3.6		1.5		(30.6)
Rate changes	—		—		9.0
Other, net	0.3		1.5		1.0
Effective income tax rate	13.2	%	13.8	%	87.9	%

The effective tax rate for fiscal 2020 was lower than the effective tax rate for fiscal 2019 primarily due to the geographic distribution of worldwide earnings. During fiscal 2019, the Company reasserted that certain historical undistributed earnings of two foreign subsidiaries will be permanently reinvested which provided a $10.5 million benefit to the effective tax rate. The impact of the changes in the Company's assertion has been included in "Withholding tax on dividends" in the effective income tax reconciliation above. The reduction to the effective tax rate compared to fiscal 2018 was offset by an increase due to the GILTI provisions of U.S. Tax Reform in fiscal 2019. The GILTI impact in the table above includes the deduction allowed by the regulations as well as the foreign tax credits attributed to GILTI. The Company has elected to treat the income tax effects of GILTI as a period cost.

During fiscal 2020, the Company recorded a $4.8 million increase to its valuation allowance due to continuing losses in certain jurisdictions within the AMER and EMEA segments, partially offset by an expiration of net operating losses that had a valuation allowance recorded.

During fiscal 2019, the Company recorded a $1.9 million increase to its valuation allowance due to continuing losses in certain jurisdictions within the AMER and EMEA segments, partially offset by an expiration of net operating losses that had a valuation allowance recorded.

During fiscal 2018, the Company recorded a reduction to its valuation allowance which includes $9.7 million related to the U.S. federal tax rate change as part of U.S. Tax Reform from 35% to 21%, $21.0 million of carryforward credits and net operating losses utilized against the deemed repatriation of undistributed foreign earnings and $3.6 million for the release of the U.S. valuation allowance due to the expected future U.S. taxable income related to the GILTI provisions of U.S. Tax Reform. These benefits were partially offset by a $1.4 million increase in foreign valuation allowances in the EMEA segment.


	2020		2019
Deferred income tax assets:
Loss/credit carryforwards	$	31,854	$	28,391
Inventories	14,450		16,809
Accrued employee benefits	14,833		15,834
Accrued liabilities	7,015		—
Other	5,434		3,353
Total gross deferred income tax assets	73,586		64,387
Less valuation allowances	(34,948)		(29,170)
Deferred income tax assets	38,638		35,217
Deferred income tax liabilities:
Property, plant and equipment	14,282		15,621
Tax on unremitted earnings	5,339		5,192
Acceleration of revenue under Topic 606	4,028		6,055
Deferred income tax liabilities	23,649		26,868
Net deferred income tax assets/(liabilities)	$	14,989	$	8,349

During fiscal 2020, the Company’s valuation allowance increased by $5.8 million. This increase is the result of increases to the valuation allowances against the net deferred tax assets in the AMER region of $2.8 million and an increase in net deferred tax assets in the EMEA region of $3.0 million.

As of October 3, 2020, the Company had approximately $201.7 million of pre-tax state net operating loss carryforwards that expire between fiscal 2021 and 2041. Certain state net operating losses have a full valuation allowance against them. The Company also had approximately $89.4 million of pre-tax foreign net operating loss carryforwards that expire between fiscal 2020 and 2026 or are indefinitely carried forward. These foreign net operating losses have a full valuation allowance against them.

During fiscal 2020, proposed and final regulations were issued and tax legislation was adopted in various jurisdictions. The impacts of these regulations and legislation on the Company’s consolidated financial condition, results of operations and cash flows are included above.

The Company has been granted a tax holiday for a foreign subsidiary in the APAC segment. This tax holiday will expire on December 31, 2034, and is subject to certain conditions with which the Company expects to continue to comply. During fiscal 2020, 2019 and 2018, the tax holiday resulted in tax reductions of approximately $28.3 million net of the impact of the GILTI provisions of U.S. Tax Reform ($0.97 per basic share, $0.95 per diluted share), $23.9 million ($0.79 per basic share, $0.77 per diluted share) and $39.1 million ($1.19 per basic share, $1.15 per diluted share), respectively.

The Company does not provide for taxes that would be payable if certain undistributed earnings of foreign subsidiaries were remitted because the Company considers these earnings to be permanently reinvested. The deferred tax liability that has not been recorded for these earnings was approximately $12.0 million as of October 3, 2020.

The Company has approximately $2.1 million of uncertain tax benefits as of October 3, 2020. The Company has classified these amounts in the Consolidated Balance Sheets as "Other liabilities" (noncurrent) in the amount of $1.3 million and an offset to "Deferred income taxes" (noncurrent asset) in the amount of $0.8 million. The Company has classified these amounts as "Other liabilities" (noncurrent) and "Deferred income taxes" (noncurrent asset) to the extent that payment is not anticipated within one year.


	2020		2019		2018
Balance at beginning of fiscal year	$	2,270	$	5,841	$	3,115
Gross increases for tax positions of prior years	509		62		21
Gross increases for tax positions of the current year	465		39		2,893
Gross decreases for tax positions of prior years	(1,148)		(3,672)		(188)
Balance at end of fiscal year	$	2,096	$	2,270	$	5,841

The amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate is $1.3 million and $1.5 million for the fiscal years ended October 3, 2020 and September 28, 2019, respectively.

The Company recognizes accrued interest and penalties related to unrecognized tax benefits in income tax expense. The total accrued penalties and net accrued interest with respect to income taxes was approximately $0.1 million for the fiscal year ended October 3, 2020, and approximately $0.2 million for each of the fiscal years ended September 28, 2019 and September 29, 2018. The Company recognized less than $0.1 million of expense for accrued penalties and net accrued interest in the Consolidated Statements of Comprehensive Income for each of the fiscal years ended October 3, 2020, September 28, 2019 and September 29, 2018.

It is possible that a number of uncertain tax positions may be settled within the next 12 months. Settlement of these matters is not expected to have a material effect on the Company’s consolidated results of operations, financial position and cash flows.

The Company files income tax returns, including returns for its subsidiaries, with federal, state, local and foreign taxing jurisdictions. The following tax years remain subject to examination by the respective major tax jurisdictions:


Jurisdiction						Fiscal Years
China						2015-2020
Germany						2015-2020
Malaysia						2016-2020
Mexico						2014-2020
Romania						2014-2020
United Kingdom						2017-2020
United States
Federal						2015, 2017-2020
State						2003-2006, 2009-2020