Income Taxes

9 Months Ended

Jun. 30, 2020

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

India Finance Act 2020

On 27 March 2020, the Indian government passed Finance Act 2020 (the "India Finance Act"), which amended rules regarding the taxation of dividends declared and distributed by Indian companies. Under the India Finance Act, future dividends declared or distributed by an Indian company are no longer subject to dividend distribution tax. Instead, the non-resident recipient will be subject to a withholding tax.

As a result of the India Finance Act, we recorded a net benefit of $13.5 in March 2020 related to our equity affiliate investment in INOX Air Products Private Limited ("INOX"). This included a benefit of $33.8 for our share of accumulated dividend distribution taxes released with respect to INOX. This benefit is reflected within "Equity affiliates' income" on our consolidated income statements and has been excluded from the results of our Industrial Gases – Asia segment. In addition, our income tax provision reflects an expense of $20.3 for estimated withholding taxes that we may incur on future dividends.

U.S. Tax Cuts and Jobs Act

Our income tax provision for the three and nine months ended 30 June 2019 reflected a discrete net income tax expense of $3.2 and $43.8, respectively, related to impacts from the U.S. Tax Cuts and Jobs Act (the “Tax Act”). The net expense for the nine months ended 30 June 2019 included the reversal of a non-recurring $56.2 benefit recorded in fiscal year 2018 related to the U.S. taxation of deemed foreign dividends. This was partially offset by a benefit of $12.4 to finalize our estimates of the impacts of the Tax Act and reduce the total expected costs of the deemed repatriation tax.

Effective Tax Rate

The effective tax rate was 19.3% and 20.7% for the three and nine months ended 30 June 2020, respectively. The effective tax rate was 17.9% and 21.3% for the three and nine months ended 30 June 2019, respectively.

Cash Paid for Taxes (Net of Cash Refunds)

Income tax payments, net of refunds, were $329.6 and $250.8 for the nine months ended 30 June 2020 and 2019, respectively.