Income Taxes

6 Months Ended

May 01, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Applied’s provision for income taxes and effective tax rate are affected by the geographical composition of pre-tax income which includes jurisdictions with differing tax rates, conditional reduced tax rates and other income tax incentives. It is also affected by events that are not consistent from period to period, such as changes in income tax laws and the resolution of prior years’ income tax filings.

Applied’s effective tax rates for the second quarter of fiscal 2022 and 2021 were 17.6 percent and 13.9 percent, respectively. The effective tax rate for the second quarter of fiscal 2022 was higher than the same period in the prior fiscal year primarily due to a reduction of deferred tax assets related to a new tax incentive in Singapore.

Applied’s effective tax rates for the first half of fiscal 2022 and 2021 were 12.2 percent and 11.7 percent, respectively. The effective tax rate for the first half of fiscal 2022 was higher than the same period in the prior fiscal year primarily due to a reduction of deferred tax assets related to a new tax incentive in Singapore, partially offset by changes in uncertain tax positions.