|9 Months Ended|
Dec. 31, 2018
|Income Tax Disclosure [Abstract]|
On December 22, 2017, the United States enacted significant changes to U.S. tax law following the passage and signing of H.R.1, “An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018” (the “Tax Act”) (previously known as “The Tax Cuts and Jobs Act”). The Tax Act included significant changes to existing tax law, including a permanent reduction to the U.S. federal corporate income tax rate from 35% to 21%, a one-time repatriation tax on deferred foreign income (“Transition Tax”), deductions, credits and business-related exclusions.
Our global anticipated annual effective income tax rate before discrete events was 30.2% and 25.4% for the nine months ended December 31, 2018 and 2017, respectively. This estimate is based on a forecast of earnings in all of our jurisdictions. The effective income tax rate represents the weighted average of the estimated tax expense over our global income before tax. The increase in effective income tax rate is due, in part, to the impact of the global intangible low taxed income (“GILTI”) tax, which is a component of the Tax Act. The GILTI tax results in additional tax in the United States related to our foreign operations.
Within the calculation of our estimated effective tax rate for the year ended March 31, 2018 as well as for the nine months ended December 31, 2018, we have used assumptions and estimates that may change as a result of future guidance, interpretation, and rule-making from the Internal Revenue Service, the SEC, and the Financial Accounting Standards Board and/or various other taxing jurisdictions. During the three months ended December 31, 2018, we finalized our Transition Tax calculation, which resulted in a Transition Tax of $4,421. This amount was below our original Transition Tax estimate of $5,126 primarily due to the application of foreign stock compensation within the calculation as well as other tax accounting assumptions. In connection with the Transition Tax calculation and other tax elections, we have reserved $1,081 for uncertain tax positions that we determined could be overturned if the calculation is examined by the tax authorities.
The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.
Reference 1: http://www.xbrl.org/2003/role/presentationRef