XML 34 R22.htm IDEA: XBRL DOCUMENT v3.20.2
Income Taxes
6 Months Ended
Sep. 26, 2020
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The Company’s effective tax rate for the three and six months ended September 26, 2020 was 14.2% and (73.5)%, respectively. Such rates differs from the United Kingdom (“U.K.”) federal statutory rate of 19% primarily due to the impacts of a valuation allowance on a portion of our consolidated pre-tax loss, a tax detriment related to share-based compensation and the impact of the tax rate change in the U.K. on the Company’s net deferred tax liabilities recorded as of September 26, 2020, as well as the impact of global financing activities. The global financing activities are related to the Company’s 2014 move of its principal executive office from Hong Kong to the U.K. and decision to become a U.K. tax resident. In connection with this decision, the Company funded its international growth strategy through intercompany debt financing arrangements between certain of our U.S., U.K. and Switzerland subsidiaries in December 2015. Due to the difference in the statutory income tax rates between these jurisdictions, the Company realized a lower effective tax rate on the consolidated pre-tax income for the three months ended September 26, 2020 and a higher effective tax rate on the consolidated pre-tax loss for the six months ended September 26, 2020, respectively.
The Company’s effective tax rate for the three and six months ended September 28, 2019 was (5.8)% and 1.7%, respectively. Such rates differed from the U.K. federal statutory rate of 19% primarily due to the favorable impact from the realization of previously unrecognized tax benefits associated with certain positions in Europe realized during the period and return to provision adjustments in the US and Europe, which resulted in a benefit to the Company’s effective income tax rate for the three and six months ended September 28, 2019. In addition, the Company had favorable effects related to global financing activities. The global financing activities are related to the Company’s 2014 move of its principal executive office from Hong Kong to the U.K. and decision to become a U.K. tax resident. In connection with this decision, the Company funded its international growth strategy through intercompany debt financing arrangements between certain of our U.S., U.K. and
Switzerland subsidiaries in December 2015. Due to the difference in the statutory income tax rates between these jurisdictions, the Company realized a lower effective tax rate.