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Income Taxes
9 Months Ended
Sep. 26, 2020
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
 
The Company has provided income taxes for the three and nine month periods ended September 26, 2020 and September 28, 2019, based on its estimate of the effective tax rate for the entire 2020 and 2019 fiscal years. The Company’s estimated annual effective tax rate is based on forecasts of income by jurisdiction, permanent differences between book and tax income, the relative proportion of income and losses by jurisdiction, and statutory income tax rates. Discrete events such as the assessment of the ultimate outcome of tax audits, audit settlements, recognizing previously unrecognized tax benefits due to the lapsing of statutes of limitation, recognizing or derecognizing deferred tax assets due to projections of income or loss and changes in tax laws are recognized in the period in which they occur.
 
Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.  The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company expects to have access to its offshore earnings with no material U.S. tax impact. Therefore, the Company does not consider earnings from its foreign subsidiaries to be permanently reinvested offshore.

The Company periodically assesses whether it is more likely than not that it will generate sufficient taxable income to realize its deferred income tax assets.  In making this determination, the Company considers all available positive and negative evidence and makes certain assumptions.  The Company considers, among other things, its deferred tax liabilities, the overall business environment, its historical earnings and losses, current industry trends and its outlook for future years.

Unrecognized tax benefits represent the difference between tax positions taken or expected to be taken in a tax return and the benefits recognized for financial statement purposes. As of September 26, 2020, the Company had $4.8 million of gross unrecognized tax benefits and $0.1 million of related accrued interest and penalties. The Company’s gross unrecognized tax benefits are not expected to decrease within the next twelve months.

On March 27, 2020, the CARES Act (the “Act”) was enacted in response to the COVID-19 pandemic. In addition, governments around the world have enacted or implemented various forms of tax relief measures in response to the
economic conditions in the wake of COVID-19. The Company is continuing to evaluate the impact of the Act and changes to income tax laws and regulations in other jurisdictions and currently does not expect they will materially impact the Company.

On July 20, 2020, the U.S. Treasury Department released final regulations regarding the Global Intangible Low-Tax Income (“GILTI”) regime related to the High-Tax Exclusion (“HTE”). The final regulations allow taxpayers to exclude certain high-taxed income of a controlled foreign corporation from their GILTI computation on an elective basis. The final regulations apply to tax years of foreign corporations that begin on or after July 23, 2020. However, taxpayers may also retroactively apply the GILTI HTE to taxable years of foreign corporations that begin after December 31, 2017 and before July 23, 2020. Darling has applied the new GILTI HTE rules to its recently filed 2019 tax return and estimated annual effective tax rate for the 2020 fiscal year.

The Company’s major taxing jurisdictions include the United States (federal and state), Canada, the Netherlands, Belgium, Brazil, Germany, France and China. The Company is subject to regular examination by various tax authorities and although the final outcome of these examinations is not yet determinable, the Company does not anticipate that any of the examinations will have a significant impact on the Company's results of operations or financial position. The statute of limitations for the Company’s major tax jurisdictions is open for varying periods, but is generally closed through the 2013 tax year.