Income Taxes

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

(10)Income Taxes

The Company recognizes interest and penalties related to uncertain tax positions within the provision for income taxes. The total amount of unrecognized tax benefits that would affect the Company’s effective tax rate if recognized is $8.9 million and $8.2 million as of December 31, 2023 and 2022, respectively. The Company recognized interest related to uncertain tax positions of $0.7 million and $0.5 million for the years ended December 31, 2023 and 2022, respectively. No penalties have been recognized in conjunction with these positions.

The following is a reconciliation of the total amounts of unrecognized tax benefits for the years ended December 31, 2023, 2022 and 2021:

In thousands	2023			2022			2021
Beginning uncertain tax benefits	$	18,715		$	22,040		$	24,034
Prior year—increases		—			—			16
Prior year—decreases		(2,261	)		(9,107	)		(2,248	)
Current year—increases		2,204			5,782			238
Ending uncertain tax benefits	$	18,658		$	18,715		$	22,040

The Company files income tax returns in the United States, Ireland and United Kingdom, or UK. The Company remains subject to tax examinations in the following jurisdictions as of December 31, 2023:

Jurisdiction	Tax Years
United States—Federal	2018-2023
United States—State	2018-2023
Ireland	2019-2023
United Kingdom	2022-2023

The Company does not expect any gross liabilities to expire in 2024 based on statutory lapses or audits.

The components of (loss) income from operations before taxes were as follows for the years ended December 31, 2023, 2022 and 2021:

In thousands	2023			2022			2021
United States	$	15,881		$	5,358		$	10,222
Ireland and United Kingdom		(85,177	)		(112,527	)		(4,368	)
Other		15,626			3,364			5,437
Total (loss) / income before taxes	$	(53,670	)	$	(103,805	)	$	11,291

The provision for income taxes shown in the accompanying consolidated statements of operations consists of the following for the years ended December 31, 2023, 2022 and 2021:

In thousands	2023			2022			2021
Current:
United States—Federal	$	1,597		$	562		$	2,690
United States—State		243			573			716
Foreign		3,602			863			156
Total current	$	5,442		$	1,998		$	3,562
Deferred:
United States—Federal		9,927			(3,721	)		5,222
United States—State		(934	)		284			(3,057	)
Foreign		(15,408	)		(1,646	)		(1,619	)
Change in valuation allowance		6,415			5,083			(546	)
Total deferred	$	—		$	—		$	—
Provision for income taxes	$	5,442		$	1,998		$	3,562

The provision for income taxes differs from the amount computed by applying the statutory income tax rate to income before taxes due to the following for the years ended December 31, 2023, 2022 and 2021:

In thousands	2023			2022			2021
Benefits from taxes at statutory rate	$	(13,418	)	$	(25,952	)	$	2,823
Rate differential		8,042			9,141			(4,416	)
Change in valuation reserves		6,415			5,083			(546	)
Nondeductible employee compensation		31			2,344			5,249
Stock option/RSU windfall		4,500			3,569			81
ISO disqualifying disposition windfall		—			—			(219	)
Research and development credits		(376	)		(958	)		(1,170	)
Tax return to provision adjustments		4,187			424			(8,372	)
Foreign exchange		(2,921	)		7,859			4,109
Permanent and other		141			(1,542	)		863
Uncertain tax positions		780			(3,290	)		5,160
Foreign-derived intangible income		(1,939	)		(2,935	)		—
Loss of tax attributes		—			8,255			—
Provision for income taxes	$	5,442		$	1,998		$	3,562

The Company is subject to a corporate tax rate in Ireland of 25% for non-trading activities and 12.5% for trading activities. For the years ended December 31, 2023, 2022, and 2021, the Company applied the statutory corporate tax rate of 25% for Amarin Corporation plc, reflecting the non-trading tax rate in Ireland. However, for Amarin Pharmaceuticals Ireland Limited, a wholly-owned subsidiary of Amarin Corporation plc, the Company applied the 12.5% Irish trading tax rate. In the table above, the Company used Amarin Corporation plc’s 25% tax rate as the starting point for the reconciliation since it is the parent entity of the business.

In April 2016, the Company adopted ASU No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Share-Based Payment Accounting which changes the accounting for certain aspects of share-based payments to employees. One aspect of the standard requires that excess tax benefits and deficiencies that arise upon vesting or exercise of share-based payments be recognized as an income tax benefit and expense in the income statement. Previously, such amounts were recognized as an increase and decrease in additional paid-in capital. This aspect of the standard was adopted prospectively, and accordingly the provisions for income taxes for the years ended December 31, 2023, 2022 and 2021 includes nil, $0.6 million and $0.1 million of excess tax benefits, respectively, arising from share-based payments during the period.

The income tax effect of each type of temporary difference comprising the net deferred tax asset as of December 31, 2023 and 2022 is as follows:

In thousands	December 31, 2023			December 31, 2022
Deferred tax assets:
Net operating losses	$	154,086		$	136,862
Stock-based compensation		9,929			11,616
Tax credits		2,409			2,639
Capitalized R&D		—			4,723
Lease liability		1,971			2,583
Other reserves and accrued liabilities		7,916			11,895
Gross deferred tax assets		176,311			170,318
Less: valuation allowance		(171,793	)		(165,378	)
Total deferred tax assets		4,518			4,940
Deferred tax liabilities:
Depreciation and amortization		(3,050	)		(3,337	)
Lease asset		(1,468	)		(1,603	)
Total deferred tax liabilities		(4,518	)		(4,940	)
Net deferred tax assets	$	—		$	—

The Company assesses whether it is more-likely-than-not that the Company will realize its deferred tax assets. The Company determined that it was more-likely-than-not that the Irish, U.S., Germany, and Israeli net operating losses and the related deferred tax assets would not be realized in future periods and a full valuation allowance has been provided for all periods.

The following table reflects the activity in the valuation allowance for the years ended December 31, 2023 and 2022:

In thousands	2023		2022
Beginning valuation allowance	$	165,378	$	160,295
Increase as reflected in income tax expense		3,494		12,942
Foreign exchange		2,921		(7,859	)
Ending valuation allowance	$	171,793	$	165,378

During 2023, the Company recorded adjustments to its deferred tax accounts related to the impact of foreign exchange rate changes and to reconcile the financial statement accounts to the amounts expected to result in future income and deductions under local law, primarily as it relates to Irish net operating losses and deferred taxes for stock compensation. These adjustments were fully offset with valuation allowances based on the Company’s position with respect to the realizability of its recorded deferred tax assets.

The Company has combined U.S. and non-U.S. net operating loss carryforwards of $959.9 million, which do not expire. The total net operating loss carryforwards increased by approximately $125.6 million from the prior year primarily as a result of current year loss generated by the Company’s U.S. and non-U.S. subsidiaries, the impact of foreign exchange rate changes and adjustments to reconcile to the amount reported on the filed 2021 foreign tax returns. In addition, the Company has U.S. Federal tax credit carryforwards of $8.6 million and state tax credit carryforwards of $3.5 million. These amounts exclude the impact of any unrecognized tax benefits and valuation allowances. These carryforwards, which will expire between 2025 and 2043, may be used to offset future taxable income, if any.

As of December 31, 2023, there are no earnings that have been retained indefinitely for reinvestment by foreign subsidiary; therefore, no provision has been made for income taxes that would be payable upon the distribution of such earnings or the recovery of the Company’s investment in its subsidiaries as the amount of the related unrecognized deferred income tax liability is zero.

The Company's and its subsidiaries' income tax returns are periodically examined by various taxing authorities. The Company is currently under audit by the IRS for the Company’s 2018 U.S. income tax return and by the New York Department of Finance for the years 2018 and 2019. Although the outcome of tax audits is always uncertain and could result in significant cash tax payments, the Company does not believe the outcome of these audits will have a material adverse effect on the Company's consolidated financial position or results of operations.