INCOME TAX EXPENSE

6 Months Ended

Dec. 26, 2021

Income Tax Disclosure [Abstract]

INCOME TAX EXPENSE

INCOME TAX EXPENSE

The Company’s provision for income taxes and effective tax rate are as follows:

	Three Months Ended						Six Months Ended
	December 26, 2021			December 27, 2020			December 26, 2021			December 27, 2020
	(in thousands, except percentages)
Income tax expense	$	161,308		$	110,554		$	324,940		$	209,375
Effective tax rate	11.9		%	11.3		%	12.0		%	11.0		%

The difference between the U.S. federal statutory tax rate of 21% and the Company’s effective tax rate for the three and six months ended December 26, 2021 and December 27, 2020 was primarily due to income in lower tax jurisdictions.

The Company transferred its international sales operations from Switzerland to Malaysia, effective from fiscal year 2022. Through fiscal year 2036, the Company expects to operate under various tax incentives in Malaysia which provide exemptions on foreign income earned and are contingent upon meeting certain conditions.

The Internal Revenue Service (“IRS”) is examining the Company’s U.S. federal income tax return for the fiscal year ended June 24, 2018. As of December 26, 2021, no significant adjustments have been proposed by the IRS. The Company is unable to make a reasonable estimate as to when cash settlements, if any, with the IRS will occur.

The Company is in various stages of examinations in connection with all of its tax audits worldwide, and it is difficult to determine when these examinations will be settled. It is reasonably possible that over the next 12-month period the Company may experience an increase or decrease in its uncertain tax positions as a result of tax examinations or lapses of statutes of limitation. The change in uncertain tax positions as a result of lapses of statutes of limitation may range up to $11.8 million.