INCOME TAXES

Income Tax Provision

The Company is subject to the provisions of the Tax Act. The Tax Act reduced the corporate income tax rate and transitioned from a worldwide corporate tax system to a modified territorial corporate tax system. The main provisions of the Tax Act affecting the Company in 2019 and 2018 include a reduced U.S. federal tax rate and a tax on global intangible low-taxed income (“GILTI”). The Company accounts for GILTI in the period in which it is incurred. The impact of the Tax Act on the Company’s effective tax rate in 2019 and 2018 is effectively eliminated by utilization of the Company’s tax losses subject to full valuation allowances.

Under ASC 270, "Interim Reporting", and ASC 740-270, "Income Taxes – Intra Period Tax Allocation", the Company is required to adjust its effective tax rate for each quarter to be consistent with the estimated annual effective tax rate. Jurisdictions with a projected loss for the full year where no tax benefit can be recognized are excluded from the calculation of the estimated annual effective tax rate. Applying the provisions of ASC 270 and ASC 740-270 could result in a higher or lower effective tax rate during a particular quarter, based upon the mix and timing of actual earnings versus annual projections.

Effective Tax Rate

The provision for income taxes for the nine months ended September 30, 2019 was $356 on a pre-tax loss from continuing operations of $1,969, compared to a provision for income taxes of $393 on pre-tax loss from continuing operations of $4,680 for the same period in 2018. The Company’s effective income tax rate was negative 18.1% and negative 8.4% for the nine months ended September 30, 2019 and 2018, respectively. For the nine months ended September 30, 2019 and 2018, the effective tax rates differed from the U.S. Federal statutory rate of 21% primarily due to state income taxes, changes in valuation allowances in the U.S. and certain foreign jurisdictions which reduces or eliminates the effective tax rate on current year profits or losses, variations from the U.S. Federal statutory rate in foreign jurisdictions, taxes on repatriations or deemed repatriation of foreign profits, and non-deductible expenses.

Uncertain Tax Positions

As of September 30, 2019 and December 31, 2018, the Company had $2,116 and $1,982, respectively, of unrecognized tax benefits, including interest and penalties, which if recognized in the future, would lower the Company’s annual effective income tax rate.

Accrued interest and penalties were $719 and $588 as of September 30, 2019 and December 31, 2018, respectively. Estimated interest and penalties are classified as part of the provision for income taxes in the Company’s Condensed Consolidated Statement of Operations and totaled to a provision of $120 and $42 for the nine months ended September 30, 2019 and 2018, respectively.

In many cases, the Company’s unrecognized tax benefits are related to tax years that remain subject to examination by the relevant tax authorities. Tax years with net operating losses ("NOLs") remain open until such losses expire or until the statutes of limitations for those years when the NOLs are used expire. As of September 30, 2019, the Company's open tax years, which remain subject to examination by the relevant tax authorities, were principally as follows:



		Year
Earliest tax years which remain subject to examination by the relevant tax authorities:
U.S. Federal		2016
Majority of U.S. state and local jurisdictions		2014
Australia		2017
Belgium		2016
Canada		2015
Netherlands		2013
Switzerland		2014
United Kingdom		2017
Jurisdictions in Asia		2018

The Company believes that its tax reserves are adequate for all years that remain subject to examination or are currently under examination.

Based on information available as of September 30, 2019, it is reasonably possible that the total amount of unrecognized tax benefits could decrease in the range of $0 to $200 over the next 12 months as a result of projected resolutions of global tax examinations and controversies and potential expirations of the applicable statutes of limitations.