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Income Taxes
9 Months Ended
Oct. 01, 2011
Income Tax Disclosure [Abstract] 
Income Tax Disclosure [Text Block]
Note 3 – Income Taxes
 
VPG calculates the tax provision for interim periods using an estimated annual effective tax rate methodology which is based on a current projection of full-year earnings before taxes amongst different taxing jurisdictions and adjusted for the impact of discrete quarterly items. The effective tax rate for the fiscal quarter ended October 1, 2011 was 16.5% versus 39.2% for the fiscal quarter ended October 2, 2010. The change in the effective tax rate is the result of a shift in the geographic mix of pretax earnings and the recording of a $0.2 million discrete tax benefit relating to changes in foreign exchange and financial asset positions. The effective tax rate for the nine fiscal months ended October 1, 2011 was 28.9% versus 39.5% for the nine fiscal months ended October 2, 2010. The change in the effective tax rate is the result of a shift in the geographic mix of pretax earnings and the recording of a net cumulative tax benefit of $0.1 million. The net tax benefit is primarily derived from losses associated with foreign exchange and financial assets offset by deferred tax reductions due to statutory rate changes.
 
Income taxes for VPG for the fiscal quarter and nine fiscal months ended October 1, 2011 and October 2, 2010, as presented in these combined and consolidated condensed financial statements, are calculated on a separate tax return basis. VPG’s operations related to the six fiscal months ended July 3, 2010 were included in Vishay Intertechnology’s U.S. federal and certain state tax returns and United Kingdom “group relief” available to entities under common control has been claimed. Vishay Intertechnology’s global tax model was developed based on its entire portfolio of businesses. Accordingly, tax results as presented for VPG for the six fiscal months ended July 3, 2010, in these financial statements are not necessarily indicative of future performance and do not necessarily reflect the results that VPG would have generated as an independent, publicly traded company for the period presented.
 
Prior to the spin-off, certain dedicated entities had taxes payable to the local taxing authorities, but VPG did not maintain taxes payable to/from parent in those jurisdictions where the taxable incomes are combined or offset. Accordingly, VPG was deemed to settle the annual current tax balances immediately with the legal tax-paying entities in the respective jurisdictions. These settlements were reflected as changes in parent net investment.

The provision for income taxes consists of provisions for federal, state, and foreign income taxes. The effective tax rates for the periods ended October 1, 2011 and October 2, 2010 reflect VPG’s expected tax rate on reported income before income tax and tax adjustments. VPG operates in an international environment with significant operations in various locations outside the United States. Accordingly, the consolidated income tax rate is a composite rate reflecting VPG’s earnings and the applicable tax rates in the various locations in which VPG operates.
 
The Company and its subsidiaries are subject to income taxes in the U.S. and numerous foreign jurisdictions. Significant judgment is required in evaluating the Company’s tax positions and determining the provision for income taxes. During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. VPG establishes reserves for tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes will be due. These reserves are established when VPG believes that certain positions might be challenged despite its belief that the tax return positions are supportable. VPG adjusts these reserves in light of changing facts and circumstances and the provision for income taxes includes the impact of reserve provisions and changes to reserves that are considered appropriate. The Company has joint and several liability with Vishay Intertechnology to multiple tax authorities up through the spin-off date. However, under the terms of the Tax Matters Agreement, Vishay Intertechnology has agreed to assume this liability and any similar liability for U.S. federal, state or local and foreign income taxes that are determined on a separate company, consolidated, combined, unitary or similar basis for each taxable period in which VPG was a part of Vishay Intertechnology’s affiliated group prior to July 6, 2010. Penalties and tax-related interest expense are reported as a component of income tax expense. The Company anticipates $0.6 million to $0.8 million of unrecognized tax benefits to be reversed within the next twelve months of the reporting date due to the expiration of statute of limitations in certain jurisdictions. This reversal will not have an impact to tax expense as the unrecognized tax benefits are a part of the indemnification from Vishay Intertechnology.