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Income Taxes and Uncertain Tax Positions
3 Months Ended
Mar. 31, 2016
Income Tax Disclosure [Abstract]  
Income Tax Disclosure [Text Block]

Note 8 – Income Taxes and Uncertain Income Tax Positions

The Company’s three months ended March 31, 2016 effective tax rate was 32.3% compared to three months ended March 31, 2015 effective tax rate of 30.8%. The increase in the first quarter of 2016 effective tax rate was primarily due to the Company recording earnings in one of its subsidiaries at a statutory tax rate of 25% during the first quarter of 2016, while it awaits recertification of a concessionary 15% tax rate, which was available to the Company during the first quarter of 2015.

As of March 31, 2016, the Company’s cumulative liability for gross unrecognized tax benefits was $11.4 million. At December 31, 2015, the Company’s cumulative liability for gross unrecognized tax benefits was $11.0 million.

The Company continues to recognize interest and penalties associated with uncertain tax positions as a component of taxes on income before equity in net income of associated companies in its Condensed Consolidated Statements of Income. The Company recognized ($0.1) million for interest and less than ($0.1) million for penalties in its Condensed Consolidated Statement of Income for the three months ended March 31, 2016, and recognized ($0.2) million for interest and $0.1 million for penalties in its Condensed Consolidated Statement of Income during the three months ended March 31, 2015. As of March 31, 2016, the Company had accrued $1.5 million for cumulative interest and $1.9 million for cumulative penalties in its Condensed Consolidated Balance Sheets, compared to $1.5 million for cumulative interest and $1.9 million for cumulative penalties accrued at December 31, 2015.

During the three months ended March 31, 2016 and 2015, the Company recognized a decrease of $0.8 million and $0.7 million, respectively, in its cumulative liability for gross unrecognized tax benefits due to the expiration of the applicable statutes of limitations for certain tax years.

The Company estimates that during the year ending December 31, 2016 it will reduce its cumulative liability for gross unrecognized tax benefits by approximately $1.9 million to $2.0 million due to the expiration of the statute of limitations with regard to certain tax positions. This estimated reduction in the cumulative liability for unrecognized tax benefits does not consider any increase in liability for unrecognized tax benefits with regard to existing tax positions or any increase in cumulative liability for unrecognized tax benefits with regard to new tax positions for the year ending December 31, 2016.

The Company and its subsidiaries are subject to U.S. Federal income tax, as well as the income tax of various state and foreign tax jurisdictions. Tax years that remain subject to examination by major tax jurisdictions include Brazil from 2000, Italy from 2007, France from 2008, the Netherlands and the United Kingdom from 2010, Spain from 2011, China and the United States from 2012, and various domestic state tax jurisdictions from 1993.

The Italian tax authorities have assessed additional tax due from the Company’s subsidiary, Quaker Italia S.r.l., relating to the tax years 2007, 2008, 2009 and 2010. In the first quarter of 2016, the Italian tax authorities delivered an audit report to Quaker Italia S.r.l. for the tax years 2011, 2012 and 2013 alleging additional tax due. In the fourth quarter of 2015, the Dutch tax authorities assessed the Company’s subsidiary, Quaker Chemical B.V., for additional income taxes related to the 2011 tax year and Quaker Chemical B.V. filed a protest of such assessment. In the first quarter of 2016, the French tax authorities gave notice that they were auditing the Company’s subsidiary, Quaker Chemical S.A. As of March 31, 2016, the Company believes it has adequate reserves, where merited, for uncertain tax positions with respect to all of these audits