Company: CPS
Filing Date: 2025-08-01
Form Type: 10-Q
Source: 0001320461-25-000131
Chunk: 97

Company: Cooper-Standard Holdings Inc.
Filing Date: 2025-08-01
Form: 10-Q
Item: Part I, Item 8
Chunk 97
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 purposes, the Company makes certain estimates and judgments, which affect its evaluation of the carrying value of its deferred tax assets, as well as its calculation of certain tax liabilities.The Company, or one of its subsidiaries, files income tax returns in the United States and other foreign jurisdictions. During the examination of the Company’s 2015-2018 U.S. federal income tax filings, the IRS asserted that income earned by a Netherlands subsidiary from its Mexican branch operations should be categorized as foreign based company sales income under Section 954(d) of the Internal Revenue Code and should be recognized currently as taxable income on the Company’s 2015-2018 U.S. federal income tax filings. As a result of this assertion, the IRS issued a Notice of Proposed Adjustment (“NOPA”). The Company believes the proposed adjustment is without merit and is in the process of contesting the matter. Currently, the protest with the IRS for the 2015-2018 tax years is with the IRS’s administrative appeals office (“IRS Appeals”). The Company does not anticipate reaching a resolution with IRS Appeals, but does plan to continue to challenge these proposed adjustments in the future through litigation, if necessary. The Company believes, after consultation with tax and legal counsel, that it is more likely than not that it will ultimately be successful in defending its position. As such, the Company has not recorded any impact of the IRS’s proposed adjustment in its condensed consolidated financial statements as of the three and six months ended June 30, 2025. In the event the Company is not successful in defending its position, the potential income tax expense impact, including interest, related to tax years 2015 through June 30, 2025 is less than $10,000.Numerous countries have agreed to a statement in support of the Organization for Economic Co-operation and Development (“OECD”) model rules that propose a global minimum tax rate of 15%, and European Union member states have agreed to implement the global minimum tax. Certain countries, including European Union member states, enacted legislation in 2024, with widespread implementation of a global minimum tax expected in 2025. The Company has recorded the impact of the global minimum tax as currently enacted in the condensed consolidated financial statements as of June 30, 2025 and for the three and six months ended June 30, 2025. As further legislation becomes effective in countries in which the Company does business, the Company’s provision for income taxes could be impacted. The Company will continue to monitor pending legislation and implementation by individual