Income Taxes

6 Months Ended

Jun. 30, 2024

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Our tax provision from income taxes for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter we update our estimate of the annual effective tax rate, and if our estimated tax rate changes, we make a cumulative adjustment. No income tax benefit was accrued for jurisdictions where we anticipate incurring a loss during the full fiscal year as the related deferred tax assets were fully offset by a valuation allowance. Our resulting effective tax rate differs from the applicable statutory rate, primarily due to tax credits, the inclusion of the global intangible low-taxed income (GILTI) provisions, the valuation allowance against deferred tax assets in loss making jurisdictions, and other permanent differences.

The increase in our effective tax rate for the three and six months ended June 30, 2024 is primarily due to the loss before income taxes incurred by Farfetch, with no offsetting tax benefit, the impact of the non-deductible estimated KFTC administrative fine (the “administrative fine”) discussed in “Note 10 - Commitments and Contingencies”, and the prospective impact of releasing the valuation allowance on our Korean deferred tax assets in the fourth quarter of 2023.