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Income Taxes
6 Months Ended
Jun. 30, 2016
Income Tax Disclosure [Abstract]  
Income Taxes
Note 10. Income Taxes
The effective tax rates for the three and six months ended June 30, 2016 and 2015 were less than 1%.  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 and six months ended June 30, 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 will continue to contest this assessment with the Danish tax authorities. We believe that the ultimate outcome of this matter will not have a material impact on our consolidated financial condition.