Income Taxes

6 Months Ended

Sep. 30, 2024

Income Tax Disclosure [Abstract]

14. INCOME TAXES

14. INCOME TAXES

For the three months ended September 30, 2024, our effective tax rate differs from the Canadian statutory rate primarily due to the full-year forecasted effective tax rate taking into account income taxed at rates that differ from the 25% Canadian rate, including withholding taxes, and changes to the Brazilian real foreign exchange rate, offset by the availability of tax credits and changes in uncertain tax positions. For the six months ended September 30, 2024, our effective tax rate differs from the Canadian statutory rate primarily due to the full-year forecasted effective tax rate that takes into account income taxed at rates that differ from the 25% Canadian rate, including withholding taxes, offset by the availability of tax credits and changes in uncertain tax positions. For the three months ended September 30, 2023, our effective tax rate differs from the Canadian statutory rate primarily due to the full-year forecasted effective tax rate that takes into account income taxed at rates that differ from the 25% Canadian rate, including withholding taxes, offset by the availability of tax credits and income not subject to tax. For the six months ended September 30, 2023, our effective tax rate differs from the Canadian statutory rate primarily due to the full-year forecasted effective tax rate taking into account income taxed at rates that differ from the 25% Canadian rate, including withholding taxes, offset by the availability of tax credits and income not subject to tax.

As of September 30, 2024, we had a net deferred tax liability of $103 million. This amount included gross deferred tax assets of approximately $1.3 billion and a valuation allowance of $689 million. It is reasonably possible that our estimates of future taxable income may change within the next twelve months resulting in a change to the valuation allowance in one or more jurisdictions.

Tax Uncertainties

Certain tax filings for fiscal 2007 through fiscal 2022 are subject to tax examinations and judicial and administrative proceedings. As a result of further settlement of audits, judicial decisions, the filing of amended tax returns, or the expiration of statutes of limitations, our reserves for unrecognized tax benefits, as well as reserves for interest and penalties, may change in the next 12 months. With few exceptions, tax returns for all jurisdictions for all tax years before fiscal 2007 are no longer subject to examination by taxing authorities or subject to any judicial or administrative proceedings. In August 2024, we received a final tax assessment for the fiscal 2013 through fiscal 2016 tax audit in Germany. Upon receipt of the final tax assessments, we filed an appeal and began the process to request a mutual agreement procedure in those jurisdictions for which there would be an offsetting benefit for the amounts paid to Germany. During the three months ended September 30, 2024, certain other estimates and assumptions associated with uncertain tax positions also changed. No changes to uncertain tax positions during the three months ended September 30, 2024, including as a result of the final Germany tax assessments, had a material impact on our financial statements for any periods presented.