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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

The provision for income taxes was as follows:

Year Ended December 31	2020			2019			2018
Current
United States
Federal	$	5.2		$	16.7		$	17.2
State		4.5			2.5			10.8
Non-United States		124.6			243.6			181.9
Total current		134.3			262.8			209.9
Deferred
United States
Federal		(11.0	)		(22.1	)		(7.5	)
State		(4.9	)		1.1			1.0
Non-United States		5.5			(22.0	)		(5.4	)
Total deferred		(10.4	)		(43.0	)		(11.9	)
Total provision	$	123.9		$	219.8		$	198.0

Income Tax Reconciliation

A tax reconciliation between taxes computed at the United States federal statutory rate of 21% and the consolidated effective tax rate is as follows:

Year Ended December 31	2020			2019			2018
Income tax based on statutory rate	$	31.0		$	143.9		$	158.5
Increase (decrease) resulting from:
Non-United States tax rate difference:
French business tax⁽¹⁾		43.7			54.9			59.1
French CICE⁽²⁾		—			—			(39.9	)
Other⁽¹⁾⁽²⁾		9.7			37.3			20.0
Repatriation of non-United States earnings		(2.0	)		(17.8	)		2.5
State income taxes, net of federal benefit		(1.3	)		3.1			8.2
Change in valuation allowance⁽³⁾		48.5			20.0			0.7
Work Opportunity Tax Credit⁽⁴⁾		(4.9	)		(10.4	)		(8.8	)
Foreign-Derived Intangible Income deduction		(8.8	)		(11.9	)		(12.5	)
United States Tax Act and French tax reform		—			—			3.2
Goodwill impairment⁽⁵⁾		13.4			11.9			—
Gain related to Manpower Switzerland and Greater China transactions⁽⁶⁾		—			(22.8	)		—
Other, net		(5.4	)		11.6			7.0
Tax provision	$	123.9		$	219.8		$	198.0

(1) The French business tax is allowed as a deduction for French income tax purposes. The gross amount of the French business tax was $55.3, $69.5 and $74.8 for 2020, 2019 and 2018, respectively. The amounts in the table above of $43.7, $54.9 and $59.1 for 2020, 2019 and 2018, respectively, represent the French business tax expense net of the French tax benefit using the United States federal rate of 21%. Included in Other Non-United States tax rate differences are benefits of $6.1, $9.3 and $10.1 for 2020, 2019 and 2018, respectively, related to the difference between the United States federal rate and the French tax rate applied to the respective gross amounts of the French business tax. In December 2020, the French Parliament approved the Finance Bill for 2021 which lowered the business tax rate from 1.5% to 0.75%. The benefit of this tax rate reduction will be reflected in our 2021 Consolidated Financial Statements.

(2) The French CICE was a payroll tax credit that was tax-free for French tax purposes and increased French earnings. The amount in the table above of $39.9 for 2018 represents the French tax benefit using the United States federal rate of 21%. Included in Other Non-United States tax rate differences is a benefit of $25.5 for 2018 related to the difference between the United States federal rate and French tax rate applied to the respective gross French CICE amount. In January 2019, the French government replaced the CICE subsidy with new subsidies that are taxable.

(3) In 2020, we determined that it was more likely than not that certain deferred tax assets in Germany and the Netherlands would not be realized and recorded income tax expense of $36.9 and $8.1, respectively, to establish valuation allowances.

(4) In December 2020, the Consolidation Appropriations Act, 2021 was signed into law, which includes a five-year extension of the Work Opportunity Tax Credit through December 31, 2025.

(5) Non-deductible portion of the goodwill impairment charges recorded in Germany in June 2020 and 2019.

(6) Non-taxable gains on the disposition of our previously held equity interest in Manpower Switzerland in April 2019 and the deconsolidation of ManpowerGroup Greater China Limited in July 2019.

Deferred Income Taxes Temporary Differences

Temporary differences, which give rise to the deferred taxes, are as follows:

December 31	2020			2019
Future Income Tax Benefits (Expense)
Accrued payroll taxes and insurance	$	32.2		$	12.8
Employee compensation payable		26.2			27.2
Pension and postretirement benefits		79.1			62.3
Intangible assets		(113.6	)		(108.7	)
Repatriation of non-United States earnings		(10.0	)		(8.8	)
Loans denominated in foreign currencies		13.5			(16.4	)
Operating lease ROU assets		(106.2	)		(115.8	)
Operating lease liabilities		112.0			118.1
Net operating losses		136.2			89.5
Other		127.9			135.0
Valuation allowance		(149.4	)		(87.8	)
Total future tax benefits	$	147.9		$	107.4
Deferred tax asset	$	165.7		$	126.2
Deferred tax liability		(17.8	)		(18.8	)
Total future tax benefits	$	147.9		$	107.4

Summary of Net Operating Loss Carryforwards

The net operating loss carryforwards expire as follows:

	United States Federal and Non-United States		United States State
2021	$	5.2	$	4.6
2022		6.7		5.0
2023		3.9		9.8
2024		7.2		55.9
2025		20.7		5.6
Thereafter		49.6		85.5
No expirations		565.3		0.8
Total net operating loss carryforwards	$	658.6	$	167.2

Summary of Unrecognized Tax Benefit Activity

The following table summarizes the activity related to our unrecognized tax benefits during 2020, 2019 and 2018:

	2020			2019			2018
Gross unrecognized tax benefits, beginning of year	$	65.9		$	32.2		$	46.1
Increases in prior year tax positions		1.4			35.7			11.4
Decreases in prior year tax positions		(4.1	)		(2.6	)		(1.8	)
Increases for current year tax positions		3.2			4.7			5.9
Expiration of statute of limitations and audit settlements		(5.5	)		(4.1	)		(29.4	)
Gross unrecognized tax benefits, end of year	$	60.9		$	65.9		$	32.2
Potential interest and penalties		3.6			3.6			2.0
Balance, end of year	$	64.5		$	69.5		$	34.2