Income taxes

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Income taxes

Income taxes

a.     Tax provision:

As of January 1, 2022, the effective place of daily management and control of the Company moved to Switzerland and the Company has become a Swiss tax resident. As a result, the income tax disclosures have been presented in accordance with the Company’s current country of tax residency.

Income (loss) before income taxes is as follows:

	Year ended December 31,
	2022		2021		2020
Swiss	$	(269,621)	$	(145,591)	$	32,010
Non-Swiss	187,775		93,516		(13,908)
Total income (loss) before income taxes	$	(81,846)	$	(52,075)	$	18,102

The provision (benefit) for income taxes from continuing operations is comprised of:

	Year ended December 31,
	2022		2021		2020
Current:
Swiss	$	469	$	281	$	3,105
Non-Swiss	10,219		5,995		(4,811)
Total current	$	10,688	$	6,276	$	(1,706)
Deferred:
Swiss	$	—	—		$	—
Non-Swiss	—		—		—
Total deferred	—		—		—
Total income tax provision	$	10,688	$	6,276	$	(1,706)

b.     Theoretical tax

The Company's effective tax rate is affected by the tax rates in the various jurisdictions in which the Company operates. Under Swiss law, the Company is subject to income tax at the federal level at a statutory rate of 8.5%, as well as at the cantonal and communal levels, resulting in an aggregate corporate tax rate of 12.0%.

For purposes of comparability, the Company used the Swiss federal statutory rate for the 2022, 2021 and 2020 tax years when presenting the Company's reconciliation of the income tax provision. 

A reconciliation of the provision for income taxes compared with the amounts at the Swiss rate was:

	Year ended December 31,
	2022			2021			2020
Income (loss) before income taxes	$	(81,846)		$	(52,075)		$	18,102
Swiss federal statutory rate	8.5		%	8.5		%	8.5		%
Income tax at federal Swiss rate	$	(6,957)		$	(4,426)		$	1,539
Foreign taxes rate differential	25,716			1,601			2,517
Change in valuation allowance	(14,238)			11,643			6,821
Effect of tax law change	5,681			—			(8,694)
Share based compensation	5,318			(4,636)			(1,615)
Research and development credits	(4,898)			(2,216)			(5,243)
Return to provision true-ups	(1,020)			2,416			—
Withholding taxes	548			273			2,366
Other	538			1,621			603
Income tax	$	10,688		$	6,276		$	(1,706)
Effective tax rate	(13.1)		%	(12.1)		%	(9.4)		%

c.     Deferred income tax

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows:

	December 31,
	2022		2021
Deferred tax assets:
Unamortized intangible assets	$	153,450	$	138,978
Impact of revenue recognition	$	82,972	$	112,251
Net operating loss carryforwards	$	65,472	$	77,664
Share based compensation	$	30,009	$	25,644
Capitalized research and development	$	16,730	$	—
Research and development credits	$	8,992	$	12,146
Lease liabilities	$	5,846	$	4,836
Interest limitations	$	—	$	7,948
Other temporary differences	$	7,089	$	3,032
Total gross deferred tax assets	$	370,560	$	382,499
Less: valuation allowance	(361,358)		(375,717)
Total deferred tax assets	9,202		6,782
Deferred tax liabilities:
Right of use assets	5,785		4,559
Fixed assets	1,730		2,214
Other liabilities	1,687		9
Total gross deferred tax liabilities	$	9,202	$	6,782
Net deferred taxes assets (liability)	$	—	$	—

d.     Carryforward loss:

In Switzerland, the Company had $525,131 of net operating carryforwards (NOLs) available at the Federal level, of which $497,371 are available at the cantonal and communal level as well. These NOLs expire from 2026 through

2029. Additionally, the Company had $37,105 of non-Swiss NOLs as of December 31, 2022, of which $4,942 carry forward indefinitely. The remainder expire from 2026 through 2041.

e.     Uncertain tax benefits:

A reconciliation of the beginning and ending balances of uncertain tax benefits is as follows:

	December 31,
	2022		2021		2020
Balance at beginning of the year	$	154	$	297	$	116
Additions (reductions) for taxes positions related to prior years	(78)		(143)		181
Balance at the end of the year	$	76	$	154	$	297

The Company recognizes interest and penalties related to unrecognized tax benefits in tax expense. During the years ended December 31, 2022, 2021 and 2020, the Company accrued $2, $5 and $21, respectively, for interest and penalties expenses related to uncertain tax positions.

The Company files income tax returns in the Switzerland and various foreign jurisdictions. Currently, the Company is under examination by the tax authorities in Israel for the tax years 2018, 2019 and 2020 and is not under examination by any other tax authority. Additional tax years within the period 2016 to 2021 remain subject to examination by Swiss, U.S. and other tax authorities