Company: BHE
Filing Date: 2025-02-24
Form Type: 10-K
Source: 0000950170-25-025644
Chunk: 162

Company: BENCHMARK ELECTRONICS INC
Filing Date: 2025-02-24
Form: 10-K
Item: Item 8
Chunk 162
---
386
        )

        (821
        )

        (569
        )

        Total income tax expense
         
        $
        20,568

        $
        16,905

        $
        16,113

       The U.S. Tax Cuts and Jobs Act (U.S. Tax Reform), which was signed into law on December 22, 2017, significantly changed U.S. tax law by, among other things, lowering corporate income tax rates to 21% from 35%, implementing a territorial tax system, adding a global intangible taxation regime (GILTI) and imposing a transition tax (Transition Tax) on deemed repatriated cumulative earnings of foreign subsidiaries.U.S. Tax Reform enacted a new global intangible low-taxed income (GILTI) provision that requires the Company to include in its U.S. income tax return foreign subsidiary earnings in excess of an allowable return on the foreign subsidiaries' tangible assets. The taxable earnings can be offset by a limited deemed paid foreign tax credit with no carrybacks or carryforwards available. The Company is subject to the GILTI provisions. The Company accounts for the GILTI as a period cost and includes the effect in the period in which it is incurred and it is not included as a factor in the determination of deferred taxes.A Global Minimum Tax (GMT) directive has been enacted by the Organization for Economic Cooperation and Development (OECD) and various foreign jurisdictions have implemented new laws based on the directive effective as of January 1, 2024. The GMT has been implemented by several international jurisdictions where the Company conducts its manufacturing operations. The adoption by these jurisdictions of the GMT requires that the Company's applicable foreign operations include in their income tax expense an additional “top-up” tax that achieves a corporate minimum effective tax rate of 15% if the overall adjusted effective tax rate is less than 15% for the jurisdiction. The Company has included in its income tax expense for the calendar year ended December 31, 2024 an estimated amount of GMT for its foreign subsidiaries as required under the applicable GMT rules of the jurisdictions that have adopted the GMT directives. The Company incurred a total Transition Tax liability of $80.5 million after reduction for net operating loss carryforwards, U.S. tax credit carryforwards and foreign tax credit carryforwards that were allowed to be utilized against its total tax liability as of December 31, 2017. The Company made an election to pay the net tax liability in installments.