INCOME TAXES

As our investments are predominantly owned by Dutch holding companies, the components of the provision / credit for income taxes and of the loss before tax have been analyzed between their Netherlands and non-Netherlands components. Similarly the Dutch corporate income tax rates have been used in the reconciliation of income taxes.

Loss from continuing operations before income taxes

The Netherlands and non-Netherlands components of loss from continuing operations before income taxes are:



	For The Year Ended December 31,
	2016			2015			2014
Domestic	$	(66,226	)	$	(73,132	)	$	(117,247	)
Foreign	(107,054		)	(29,668		)	(35,576		)
Total	$	(173,280	)	$	(102,800	)	$	(152,823	)

Total tax (provision) / credit for the years ended December 31, 2016, 2015 and 2014 was allocated as follows:



	For The Year Ended December 31,
	2016			2015		2014
Income tax (provision) / credit from continuing operations	$	(7,317	)	$	515	$	1,358
Income tax credit from discontinued operations	—			91		1,987
Total (provision) / tax credit	$	(7,317	)	$	606	$	3,345

Provision / Credit for Income Taxes

The Netherlands and non-Netherlands components of the provision / credit for income taxes from continuing operations consist of:



	For The Year Ended December 31,
	2016			2015			2014
Current income tax provision:
Domestic	$	—		$	—		$	—
Foreign	(5,261		)	(550		)	(558		)
	(5,261		)	(550		)	(558		)
Deferred tax (provision) / credit:
Domestic	—			—			—
Foreign	(2,056		)	1,065			1,916
	(2,056		)	1,065			1,916
(Provision) / credit for income taxes	$	(7,317	)	$	515		$	1,358

In 2016, 2015 and 2014, the net (provision) / credit for income taxes is less than the (provision) / credit computed at statutory tax rates primarily due to losses on which no tax benefit has been received.

Reconciliation of Effective Income Tax Rate

The following is a reconciliation of income taxes, calculated at statutory Netherlands rates, to the (provision) / credit for income taxes included in the accompanying Consolidated Statements of Operations and Comprehensive Income / Loss for the years ended December 31, 2016, 2015 and 2014:



	For The Year Ended December 31,
	2016			2015			2014
Income taxes at Netherlands rates (25%)	$	43,310		$	25,689		$	38,193
Jurisdictional differences in tax rates	(43,049		)	(17,462		)	(12,965		)
Unrecognized tax benefits	(925		)	—			—
Losses expired	(1,847		)	(4,009		)	(4,899		)
Change in valuation allowance	(5,863		)	3,614			(7,012		)
Non-deductible expenses	(395		)	(1,859		)	(5,624		)
Other	1,452			(5,458		)	(6,335		)
(Provision) / credit for income taxes	$	(7,317	)	$	515		$	1,358

In 2016, 2015 and 2014, the jurisdictional rate difference mainly arises as a result of a loss in Bermuda where there is no income tax.

Components of Deferred Tax Assets and Liabilities

The following table shows the significant components included in deferred income taxes as at December 31, 2016 and 2015:



	December 31, 2016			December 31, 2015
Assets:
Tax benefit of loss carry-forwards and other tax credits	$	112,585		$	111,526
Programming rights	2,935			4,052
Property, plant and equipment	3,427			4,427
Accrued expenses	4,699			4,544
Other	1,623			1,718
Gross deferred tax assets	125,269			126,267
Valuation allowance	(110,920		)	(109,481		)
Net deferred tax assets	$	14,349		$	16,786

Liabilities:
Broadcast licenses, trademarks and customer relationships	$	22,704		$	24,897
Property, plant and equipment	142			173
Programming rights	7,182			7,082
Other	86			75
Total deferred tax liabilities	30,114			32,227
Net deferred income tax liability	$	15,765		$	15,441

Deferred tax is recognized on the consolidated balance sheet as follows:



	December 31, 2016		December 31, 2015
Net current deferred tax assets ⁽¹⁾	$	—	$	10,425
Net non-current deferred tax assets	4,570		124
	4,570		10,549

Net current deferred tax liabilities ⁽¹⁾	—		—
Net non-current deferred tax liabilities	20,335		25,990
	20,335		25,990

Net deferred income tax liability	$	15,765	$	15,441


⁽¹⁾	Reflects the prospective adoption in 2016 of accounting guidance requiring that deferred tax balances be classified as non-current in our consolidated balance sheets. See Note 2, "Basis of Presentation and Summary of Significant Accounting Policies".

We provided a valuation allowance against potential deferred tax assets of US$ 110.9 million and US$ 109.5 million as at December 31, 2016 and 2015, respectively, since it has been determined by management, based on the weight of all available evidence, that it is more likely than not that the benefits associated with these assets will not be realized. During 2016, valuation allowances of US$ 2.7 million and US$ 7.1 million were released in Bulgaria and the Slovak Republic, respectively, following a period of consistent profitability which resulted in a net credit to the income statement of US$ 7.4 million.

During 2016, we had the following movements on valuation allowances:



Balance at December 31, 2015	$	109,481
Created during the period	15,738
Utilized	(2,519		)
Released due to changes in future profitability	(7,356		)
Foreign exchange	(4,674		)
Other	250
Balance at December 31, 2016	$	110,920

As of December 31, 2016 we had operating loss carry-forwards that will expire in the following periods:



	2017		2018		2019		2020		2021-36		Indefinite
Bulgaria	$	—	$	—	$	—	$	6,182	$	—	$	—
Czech Republic	559		3		—		—		—		—
The Netherlands	27,190		25,832		57,430		46,427		268,060		—
Slovak Republic	5,749		—		—		—		—		—
Slovenia	—		—		—		—		—		21,898
United Kingdom	—		—		—		—		—		1,395
Total	$	33,498	$	25,835	$	57,430	$	52,609	$	268,060	$	23,293

The losses are subject to examination by the tax authorities and to restriction on their utilization. In particular, the losses can only be utilized against profits arising in the legal entity in which they arose.

We have provided valuation allowances against most of the above loss carry-forwards. However, valuation allowances have not been provided against the loss carry-forwards in our main operating company in Bulgaria and in the Slovak Republic on the basis of future reversals of existing taxable temporary differences and taxable income from future trading. The tax benefits associated with the tax losses in the United Kingdom were recognized following the adoption of the FASB guidance simplifying accounting for share-based payment transactions. However, a valuation allowance was also recognized due to a lack of foreseeable future UK income.

As at December 31, 2016 and 2015, we had no undistributed earnings in subsidiaries giving rise to a temporary difference.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:



Balance at December 31, 2013	$	108
Decreases resulting from the expiry of the statute of limitations	(51		)
Other	(4		)
Balance at December 31, 2014	53
Decreases resulting from the expiry of the statute of limitations	(53		)
Balance at December 31, 2015	—
Increases for tax positions taken during a prior period	766
Increases for tax positions taken during the current period	159
Balance at December 31, 2016	$	925

We do not anticipate a material increase or decrease in unrecognized tax benefits within the next 12 months.

Our subsidiaries file income tax returns in the Netherlands and various other tax jurisdictions. As at December 31, 2016, our subsidiaries are generally no longer subject to income tax examinations for years before:



Tax Jurisdiction	Year
Bulgaria	2010
Croatia	2012
Czech Republic	2011
The Netherlands	2014
Romania	2014
Slovak Republic	2010
Slovenia	2008
United Kingdom	2015

We recognize, when applicable, both accrued interest and penalties related to unrecognized tax benefits in income tax expense in the accompanying consolidated statements of operations and comprehensive income / loss. There were no significant interest or penalties accrued in the years ended December 31, 2016, 2015 and 2014.