INCOME TAXES

The domestic and foreign components of income (loss) before provision for income taxes were as follows:



(In millions)	2016		2015		2014
Domestic	$	60.9	$	117.5	$	(103.4	)
Foreign	613.3		530.0		494.8
Total	$	674.2	$	647.5	$	391.4

Domestic income (loss) before provision for income taxes included an actuarial gain (loss) related to the Company’s United States retirement plans of $39.1 million, $20.2 million and $(138.9) million in 2016, 2015 and 2014, respectively.

Taxes paid were $85.3 million, $91.5 million and $102.9 million in 2016, 2015 and 2014, respectively.

The provision (benefit) for income taxes attributable to income consisted of the following:



(In millions)	2016			2015			2014
Federal:
Current	$	(2.7	)	$	6.8		$	(35.4	)
Deferred	(9.3		)	(4.1		)	(54.8		)
State and local:
Current	(2.4		)	6.4			3.4
Deferred	(0.9		)	(22.2		)	(4.3		)
Foreign:
Current	129.3			70.6			15.5
Deferred	11.5			17.6			28.1
Total	$	125.5		$	75.1		$	(47.5	)

The provision (benefit) for income taxes for the years 2016, 2015 and 2014 was different from the amount computed by applying the statutory United States federal income tax rate to the underlying income as follows:



	2016		2015		2014
Statutory federal tax rate	35.0	%	35.0	%	35.0	%
State and local income taxes, net of federal income tax benefit	0.4	%	(1.3	)%	(1.1	)%
Effects of international jurisdictions, including foreign tax credits	(12.9	)%	(15.0	)%	(23.3	)%
Change in estimates for uncertain tax positions	(3.7	)%	(7.6	)%	(24.0	)%
Change in valuation allowance	(0.1	)%	(0.2	)%	1.1	%
Other, net	(0.1	)%	0.7	%	0.2	%
Effective tax rate	18.6	%	11.6	%	(12.1	)%

Effects of international jurisdictions, including foreign tax credits, reflected in the above table for 2016, 2015 and 2014 include not only those taxes at statutory income tax rates but also taxes at special rates levied on income from certain jurisdictional activities. The Company expects to benefit from these special rates until 2023.

The components of deferred income tax assets and liabilities were as follows:



(In millions)	2016			2015
Gross deferred tax assets
Tax loss and credit carryforwards	$	248.1		$	240.1
Employee compensation and benefits	88.7			135.3
Inventories	27.2			24.0
Accounts receivable	26.6			28.5
Accrued expenses	31.7			31.6
Other, net	0.0			37.1
Subtotal	422.3			496.6
Valuation allowances	(43.9		)	(43.8		)
Total gross deferred tax assets, net of valuation allowances	$	378.4		$	452.8
Gross deferred tax liabilities
Intangibles	$	(1,157.0	)	$	(1,199.2	)
Property, plant and equipment	(67.6		)	(77.8		)
Other, net	(14.1		)	—
Total gross deferred tax liabilities	$	(1,238.7	)	$	(1,277.0	)
Net deferred tax liability	$	(860.3	)	$	(824.2	)

At the end of 2016, the Company had on a tax effected basis approximately $286.3 million of net operating loss and tax credit carryforwards available to offset future taxable income in various jurisdictions. This included net operating loss carryforwards of approximately $19.5 million and $37.2 million for federal and various state and local jurisdictions, respectively, and $28.9 million for various foreign jurisdictions. The Company also had federal and state tax credit and other carryforwards of $200.7 million. The carryforwards expire principally between 2017 and 2037.

The Company does not provide for deferred taxes on the excess of financial reporting over tax basis on its investments in all of its foreign subsidiaries that are essentially permanent in duration. The earnings that are permanently reinvested were $2.6 billion as of January 29, 2017. It is not practicable to estimate the amount of tax that might be payable if these earnings were repatriated due to the complexities associated with the hypothetical calculation.

Uncertain tax positions activity for each of the last three years was as follows:



(In millions)	2016			2015			2014
Balance at beginning of year	$	226.8		$	244.5		$	485.7
Increases related to prior year tax positions	2.8			4.3			16.8
Decreases related to prior year tax positions	(9.9		)	(12.5		)	(239.3		)
Increases related to current year tax positions	52.0			40.0			38.2
Lapses in statute of limitations	(24.4		)	(44.6		)	(36.3		)
Effects of foreign currency translation	(1.7		)	(4.9		)	(20.6		)
Balance at end of year	$	245.6		$	226.8		$	244.5

In 2014, the Company resolved for $179.0 million an uncertain tax position related to European and United States transfer pricing arrangements, for which it had previously recorded a liability of approximately $185.0 million.

The entire amount of uncertain tax positions as of January 29, 2017, if recognized, would reduce the future effective tax rate under current accounting provisions.

Interest and penalties related to uncertain tax positions are recorded in the Company’s income tax provision. Interest and penalties recognized in the Company’s Consolidated Income Statements for the years 2016, 2015 and 2014 totaled an expense of $1.0 million, a benefit of $(0.9) million and a benefit of $(25.9) million, respectively. Interest and penalties accrued in the Company’s Consolidated Balance Sheets as of January 29, 2017, January 31, 2016 and February 1, 2015 totaled $27.8 million, $27.6 million and $28.6 million, respectively. The Company recorded its liabilities for uncertain tax positions principally in accrued expenses and other liabilities in its Consolidated Balance Sheets.

The Company files income tax returns in the United States and in various foreign, state and local jurisdictions. With few exceptions, examinations have been completed by tax authorities or the statute of limitations has expired for United States federal, foreign, state and local income tax returns filed by the Company for years through 2005. It is reasonably possible that a reduction of uncertain tax positions in a range of $45.0 million to $55.0 million may occur within 12 months of January 29, 2017.