Company: SNPS
Filing Date: 2025-09-09
Form Type: 10-Q
Source: 0000883241-25-000024
Chunk: 77

Company: SYNOPSYS INC
Filing Date: 2025-09-09
Form: 10-Q
Item: Item 1
Chunk 77
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2024, primarily due to the tax benefits from a full valuation allowance release against California research credits.Our effective tax rate for the nine months ended July 31, 2025, is lower than the statutory federal corporate tax rate of 21% primarily due to the capital loss on the sale of our ownership in OpenLight in the first quarter of 2025, tax benefits from the release of a full valuation allowance against California research credits, U.S. federal research tax credits, foreign-derived intangible income deduction, excess tax benefits from stock-based compensation and U.S. foreign tax credits, partially offset by state taxes, capitalized transaction costs and the effect of non-deductible stock-based compensation.The timing of the resolution of income tax examinations, and the amounts and timing of various tax payments that are part of the settlement process, are highly uncertain. Variations in such amounts and/or timing could cause large fluctuations in the balance sheet classification of current and non-current assets and liabilities. During the next 12 months, it is reasonably possible that certain audits and ongoing tax litigation will be resolved, or that the statute of limitations on certain state and foreign income and withholding taxes will expire, or both. Given the uncertainty as to ultimate settlement terms, the timing of payment and the impact of such settlements on other uncertain tax 

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positions, we estimate a potential decrease in underlying unrecognized tax benefits to be between $0 and $9.0 million.Non-U.S. ExaminationsOne of our Korean subsidiaries, Ansys Korea, is currently involved in various stages of Tax Tribunal and Korea's High Court appeals regarding Korea's National Tax Service assessments of withholding taxes against Ansys Korea for 2017-2023. In connection with this matter, we have recorded the net impact of the unrecognized tax benefit and offsetting foreign tax credit. We are under examinations by tax authorities in certain jurisdictions. No material assessments have been proposed in these examinations. Legislative DevelopmentsOn July 4, 2025, President Donald J. Trump signed H.R. 1, the One Big Beautiful Bill Act (OBBB) into law. The OBBB includes many changes to corporate income tax law and will go into effect in fiscal 2026 and fiscal 2027 for Synopsys. We are currently evaluating the impacts of OBBB.Effective in fiscal 2024, we are subject to the new 15% corporate alternative minimum tax (CAMT) enacted as part of the Inflation Reduction Act of 2022 (IR Act). We do not expect