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Income Taxes
3 Months Ended
Mar. 31, 2016
Income Tax Disclosure [Abstract]  
Income Taxes

Note 10. Income Taxes

The effective tax rates for the three months ended March 31, 2016 and 2015 were less than 2%.  The effective tax rates differ from the statutory rate primarily as a result of not recognizing a deferred tax asset for U.S. losses due to having a full valuation allowance against U.S. deferred tax assets. There were no material changes to the unrecognized tax benefits during the three months ended March 31, 2016 and 2015.

In April 2009, Zendesk’s entity in Denmark (“Zendesk Denmark”) transferred certain assets to Zendesk’s U.S. entity.  In April 2015, the Danish Tax Authority (“SKAT”) issued a letter of intent in contemplation of adjusting the value of the reported asset transfer. We submitted a written rebuttal to SKAT’s proposal in August 2015. In March 2016, we received an assessment from SKAT indicating that SKAT believes the value of the transferred assets to be $5.4 million. SKAT’s assessment would give rise to a potential payment of $1.9 million, including income tax and interest. We disagree with SKAT’s findings and intend to contest this assessment with the Danish National Tax Tribunal and we believe that the ultimate outcome of this matter will not have a material impact on our financial condition, liquidity or cash flows.