Taxes on Income (Loss)

9 Months Ended

Sep. 30, 2016

Income Tax Disclosure [Abstract]

Taxes on Income (Loss)

Taxes on Income (Loss)

The effective tax rate for the three months ended September 30, 2016 and 2015 was 59% and 15%, respectively. The effective tax rate for the nine months ended September 30, 2016 and 2015 was (1,100)% and 18%, respectively. The effective tax rate for the nine months ended September 30, 2016 is not meaningful because of the correlation of the tax expense to the entities with a pre-tax loss for which no benefit is recognized. The effective tax rate for the full fiscal year 2016 is expected to be approximately 16%.

The Company recorded a tax provision of $64 million for the three months ended September 30, 2016, compared to a tax provision of $39 million for the three months ended September 30, 2015. The provision for the three months ended September 30, 2015 included a one-time benefit of $23 million resulting from the release of a foreign valuation allowance and a benefit from a transfer pricing adjustment.

The Company recorded a tax provision of $33 million for each of the nine months ended September 30, 2016 and 2015.

Tax Matters Agreement

As described in Note 3, "Discontinued Operations", Hertz Global and Hertz entered into the Tax Matters Agreement with Herc Holdings and Herc Rentals to govern the parties’ respective rights, responsibilities and obligations after the Spin-Off with respect to tax liabilities and benefits, tax attributes, tax contests and other tax matters regarding income taxes, other taxes and related tax returns.