Income Tax

12 Months Ended

Jun. 30, 2022

The major components of income tax expense for the fiscal years ended 2022, 2021 and 2020 are as follows:


	Fiscal Year Ended June 30,
	2022		2021		2020
	(U.S. $ in thousands)
Current income tax:
Current income tax charge	$	(51,417)	$	(74,126)	$	(25,715)
Adjustments in respect of current income tax of previous years	(472)		702		1,276
Deferred tax:
Benefit relating to origination and reversal of temporary differences	2,186		11,422		18,702
Adjustments in respect of temporary differences of previous years	151		351		1,292
Income tax expense	$	(49,552)	$	(61,651)	$	(4,445)

A reconciliation between income tax expense and the product of accounting loss multiplied by the UK's domestic tax rate for the fiscal years ended 2022, 2021 and 2020, is as follows:


	Fiscal Year Ended June 30,
	2022		2021		2020
	(U.S. $ in thousands)
Loss before income tax expense	$	(564,572)	$	(634,664)	$	(346,209)
At the United Kingdom's statutory income tax rate of 19% in fiscal years 2022, 2021 and 2020	107,269		120,586		65,688
Tax effect of amounts that are not taxable (deductible) in calculating taxable income:
Research and development incentive	15,597		7,693		6,816
Non-deductible charges relating to exchangeable senior notes	(92,275)		(149,265)		(80,262)
Share-based payment	(9,162)		(14,674)		(10,619)
Foreign tax credits not utilized	(518)		(166)		(93)
Foreign tax paid	9,105		15,797		4,765




Foreign tax rate differential	30,879		(9,008)		1,416
Adjustment to unrecognized deferred tax balance	(102,986)		(37,062)		8,835
Other items, net	(7,140)		3,395		(3,559)
	(49,231)		(62,704)		(7,013)
Adjustments in respect to current income tax of previous years	(472)		702		1,276
Adjustments in respect to deferred income tax of previous years	151		351		1,292
Income tax expense	$	(49,552)	$	(61,651)	$	(4,445)

In March 2021, the UK announced an increase in the main corporate tax rate from 19% to 25%, effective for financial years beginning after April 1, 2023. Due to the magnitude of our UK operations, this change is not expected to have a material impact to the Company.

Details of deferred taxes, recognized and unrecognized:


	As of June 30,
	2022		2021
	(U.S. $ in thousands)
Depreciation for tax purposes	$	2,143	$	275
Provisions, accruals and prepayments	(3,245)		(1,427)
Deferred revenue	2,963		(948)
Unrealized foreign currency exchange losses (gains)	(3,450)		9
Unrealized investment gains	(16,205)		(23,150)
Carried forward tax losses	8,101		7,610
Carried forward tax credits—credited to profit and loss	13,557		9,129
Intangible assets	10,409		15,555
Tax benefit from share plans—income	1,651		1,143
Tax benefit from share plans—equity	133		733

Other, net	246		620

Deferred tax assets, net	$	16,303	$	9,549
Reflected in the consolidated statements of financial position as follows:
Deferred tax assets	$	42,760	$	36,174
Deferred tax liabilities	(26,457)		(26,625)
Deferred tax assets, net	$	16,303	$	9,549
Items for which no deferred tax asset has been recognized:
Depreciation and amortization for tax purposes	$	15,720	$	9,747
Provisions, accruals and prepayments	61,597		45,711
Deferred revenue	161,508		86,722
Unrealized foreign currency exchange gains	2,484		3,569
Unused tax losses	1,005,649		814,106
Intangible assets	1,527,714		1,682,610
Tax benefit from share plans- income	76,843		69,113
Tax benefit from share plans- equity	15,402		74,631

Carried forward tax credits- credited to profit and loss	142,178		100,251
Unrealized loss on investments	11,169		1,541
Other, net	38,561		28,063
	$	3,058,825	$	2,916,064

Details of deferred tax benefits and expenses:


	Fiscal Year Ended June 30,
	2022		2021		2020
	(U.S. $ in thousands)
Depreciation for tax purposes	$	1,691	$	(215)	$	(2,564)
Provisions, accruals and prepayments	(1,697)		(1,843)		(7,164)
Deferred revenue	1,291		(1,198)		(23,932)
Unrealized foreign currency exchange losses (gains)	(802)		1,422		(101)
Unrealized investment losses (gains)	8		5,269		(405)
Carried forward tax losses (gains)	1,966		1,970		(409)
Carried forward tax credits—credited to profit and loss	6,757		5,555		(3,005)
Intangible assets	(3,853)		44		13,095
Tax benefit from share plans—income	718		162		331
Tax benefit (expense) from share plans—equity	(870)		(704)		300
Deferred foreign taxes	—		—		10,605
Other, net	(2,872)		1,311		(2,667)
Deferred tax benefit (expense)	$	2,337	$	11,773	$	(15,916)

Reconciliation of net deferred tax assets:


	2022		2021
	(U.S. $ in thousands)

Balance at the beginning of	$	9,549	$	4,047
Deferred tax expense for the year	2,337		11,773
Credited (Debited) to equity	6,975		(6,147)

Impact from business combinations	(733)		(97)
Currency revaluation impact	(341)		(27)
Balance at the end of	$	16,303	$	9,549

The assessment of the realizability of the Australian and U.S. deferred tax assets is based on all available positive and negative evidence. Such evidence includes, but is not limited to, recent cumulative earnings or losses, expectations of future taxable income by taxing jurisdiction, and the carry-forward periods available for the utilization of deferred tax assets. The assessment of the recoverability of Australian and U.S. deferred tax assets will not change until there is sufficient evidence to support their realizability. The Group will continue to assess and record any necessary changes to align its deferred tax assets to their realizable value.

The Group does not have any material deferred tax liabilities associated with investments in its subsidiaries.

The Group recognizes certain amounts directly in equity including current tax benefits related to tax deductions in excess of cumulative book expense for share based payment awards, deferred tax benefits related to revaluing its deferred tax assets for share based payment awards to fair market value at each reporting date, and deferred tax expense or benefit related to unrealized gains and losses that are recorded in other comprehensive income.


	2022		2021
	(U.S. $ in thousands)
Amounts recognized directly in equity:

Net deferred tax—credited (debited) directly to equity	$	6,975	$	(6,147)

The Group has the following losses and credits available for offsetting future profit and taxes:


	Expiration	Amount carried forward		Amount recognized as of June 30, 2022
		(U.S. $ in thousands)
U.S. net operating loss (Pre - 2017 Tax Reform)	June 30, 2030-December 30, 2038	$	137,635	$	230
U.S. net operating loss (Post - 2017 Tax Reform)	None	4,290,309		7,172
State net operating loss- various states	June 30, 2024-June 30, 2041	1,269,537		685
UK net operating loss	None	14,602		—
U.S. research and development credits	June 30, 2025-June 30, 2041	98,885		813
State research and development credits- California	None	54,033		374
State research and development credits- Texas	June 30, 2036-June 30, 2041	6,157		6,157
Australia capital loss	None	4,637		—
India alternative minimum tax credits	March 31, 2036 - March 31, 2037	6,211		6,211
Poland research and development credits	June 30,2026 - June 30,2028	1,729		—