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INCOME TAXES
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
Income Before Provision for Income Taxes
Income before provision for income taxes based on geographic location is disclosed in the table below:
For the Years Ended December 31,
202320222021
Income before provision for income taxes:
United States$210,875 $78,564 $128,498 
Foreign325,710 428,694 404,894 
Total
$536,585 $507,258 $533,392 
Provision for Income Taxes
The provision for income taxes consists of the following:
For the Years Ended December 31,
202320222021
Current
Federal$54,763 $20,044 $22,742 
State15,922 10,116 6,735 
Foreign86,012 99,847 69,162 
Deferred
Federal(20,519)(26,379)(40,421)
State(5,206)(3,483)(2,576)
Foreign(11,470)(12,303)(3,902)
Total
$119,502 $87,842 $51,740 
As part of the U.S. Tax Act, as determined as of December 31, 2017, the Company was required to make annual installment payments for the one-time transition tax on accumulated foreign subsidiary earnings not previously subject to U.S. income tax at a rate of 15.5% to the extent of foreign cash and certain other net current assets and 8.0% on the remaining earnings. As of December 31, 2023, the remaining unpaid balance of this one-time transition tax was $25.6 million to be paid in annual installments with the final payment due in 2025.
As of December 31, 2023, the Company had approximately $1.563 billion of accumulated undistributed foreign earnings that are expected to be indefinitely reinvested. Due to the enactment of the U.S. Tax Act and the one-time transition tax on accumulated foreign subsidiary earnings, these accumulated foreign earnings are no longer expected to be subject to U.S. federal income tax if repatriated but could be subject to state and foreign income and withholding taxes.
Effective Tax Rate Reconciliation
The reconciliation of the provision for income taxes at the federal statutory income tax rate to the Company’s effective income tax rate is as follows:
For the Years Ended December 31,
202320222021
Provision for income taxes at federal statutory rate$112,690 $106,514 $112,016 
Increase/(decrease) in taxes resulting from:
GILTI and BEAT U.S. taxes 391 355 229 
Excess tax benefits relating to stock-based compensation(19,829)(35,119)(71,628)
Foreign tax expense and tax rate differential5,208 4,902 (206)
Effect of permanent differences 4,210 7,812 4,756 
State taxes, net of federal benefit 12,347 9,323 9,192 
Stock-based compensation expense5,869 3,869 1,102 
Impact of election to change entity classification(2,109)(8,264)— 
Tax credits (1,824)(2,876)(4,100)
Other 2,549 1,326 379 
Provision for income taxes
$119,502 $87,842 $51,740 

The Company’s worldwide effective tax rate for the years ended December 31, 2023, 2022 and 2021 was 22.3%, 17.3% and 9.7%, respectively.
The provision for income taxes in the year ended December 31, 2023 was unfavorably impacted by a charge of $2.4 million reflecting an increase in U.S. state tax and a charge of $3.2 million for losses in certain foreign jurisdictions with no corresponding tax benefit. In addition, the Company recorded excess tax benefits upon vesting or exercise of stock-based awards of $19.8 million, $35.1 million and $71.6 million during the years ended December 31, 2023, 2022 and 2021, respectively.
In Belarus, member technology companies of High-Technologies Park, including the Company’s local subsidiary, have a full exemption from Belarus income tax on qualifying income through January 2049. However, beginning February 1, 2018, the earnings of the Company’s Belarus local subsidiary became subject to U.S. income taxation due to the Company’s decision to change the tax status of the subsidiary. There was no aggregate dollar benefit derived or impact on diluted net income per share from this tax holiday for the years ended December 31, 2023, 2022 and 2021.
Deferred Income Taxes
Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.
Significant components of the Company’s deferred tax assets and liabilities are as follows:
As of December 31, 2023As of December 31, 2022
Deferred tax assets:
Property and equipment$13,359 $11,587 
Accrued expenses77,757 87,816 
Accrued sales discounts11,148 9,185 
Stock-based compensation 36,488 33,078 
Operating lease liabilities 40,549 43,662 
R&D capitalization77,601 36,915 
Deferred consideration13,762 14,030 
Foreign currency exchange2,688 11,284 
Other27,149 19,955 
Deferred tax assets$300,501 $267,512 
Less: valuation allowance(7,622)(6,728)
Total deferred tax assets$292,879 $260,784 
Deferred tax liabilities:
Property and equipment
$13,590 $15,324 
Intangible assets27,914 24,523 
Operating lease right-of-use assets
39,551 42,211 
U.S. taxation of foreign subsidiaries13,955 11,465 
Other8,711 7,232 
Total deferred tax liabilities$103,721 $100,755 
Net deferred tax assets$189,158 $160,029 
As of December 31, 2023 and 2022, the Company classified $8.7 million and $12.8 million, respectively, of deferred tax liabilities as Other noncurrent liabilities in the consolidated balance sheets.
Included in the stock-based compensation expense deferred tax asset at December 31, 2023 and 2022 is $3.9 million and $4.6 million, respectively, that is related to acquisitions and is amortized for tax purposes over a 10 to 15-year period.
As of December 31, 2023, the Company’s domestic and foreign net operating loss (“NOL”) carryforwards for income tax purposes were approximately $1.8 million and $54.8 million, respectively. If not utilized, the domestic NOL carryforwards will begin to expire in 2024. The foreign NOL carryforwards may be carried forward indefinitely, with the exception of $8.9 million that will begin to expire on various dates between 2024-2030 if not used. The Company maintains a valuation allowance primarily related to the net operating loss carryforwards in certain foreign jurisdictions that the Company believes are not likely to be realized, which totaled $35.0 million as of December 31, 2023.
Unrecognized Tax Benefits
As of December 31, 2023 and 2022, the total amount of gross unrecognized tax benefits was $11.5 million and $7.9 million, respectively. These amounts represent the amount of unrecognized tax benefits that, if recognized, would favorably affect the effective tax rate in future periods and are included in Income taxes payable, noncurrent within the consolidated balance sheets.
The Company’s policy is to recognize interest and penalties related to uncertain tax positions as a component of its provision for income taxes. As of December 31, 2023 and 2022, the Company accrued $1.5 million and $0.7 million respectively, of interest and penalties resulting from such unrecognized tax benefits.
A reconciliation of the beginning and ending balances of the gross unrecognized tax benefits changes for the years ended December 31, 2023, December 31, 2022 and December 31, 2021 are as follows:
For the Years Ended December 31,
202320222021
Beginning Balance$7,865 $8,155 $3,317 
Increases in tax positions from current year3,307 4,739 5,310 
Increases in tax positions from acquisitions— 393 — 
Increases in tax positions from prior years716 2,447 1,350 
Decreases in tax positions from prior years(47)(6,945)— 
Decreases due to lapse of statute of limitations(438)(1,121)(1,298)
Currency68 197 (524)
Ending Balance$11,471 $7,865 $8,155 
There were no tax positions for which it was reasonably possible that unrecognized tax benefits will significantly increase or decrease within twelve months of the reporting date.
The Company is subject to taxation in the United States and various states and foreign jurisdictions including Germany, Ukraine, the United Kingdom, Canada, Switzerland, Netherlands, Poland, India, and Mexico. With few exceptions, as of December 31, 2023, the Company is no longer subject to U.S. federal, state, local or foreign examinations by tax authorities for years before 2019.