Company: PTC
Filing Date: 2025-11-21
Form Type: 10-K
Source: 0001193125-25-291326
Chunk: 81

Company: PTC INC.
Filing Date: 2025-11-21
Form: 10-K
Item: Item 6
Chunk 81
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man Islands. In 2025, 2024, and 2023, the foreign rate differential predominantly relates to these earnings. In addition to the foreign rate differential, our tax rate differed from the U.S. statutory federal income tax due to the net effects of the GILTI and FDII regimes (together referred to as U.S. Tax reform), and the excess tax benefit related to stock-based compensation.

F-23

Our effective tax rates for 2025 and 2024 were impacted by a number of offsetting items as outlined below, as well as by the year-over-year increase in Income before income taxes, which was primarily domestic; however, there was ultimately no net change in the effective tax rate year-over-year. In 2025 and 2024, our rate included the effects of IRS procedural guidance requiring consent for previously automatic changes of accounting method. The IRS procedural guidance change significantly increased our estimated taxable income in 2024, with a lesser impact to taxable income in 2025. In 2025, we recorded tax expense of $10.9 million primarily related to accrued interest stemming from the effects of the procedural guidance. In 2024, we recorded a benefit of $4.4 million primarily related to an increase to the estimated tax benefit for the deductions associated with GILTI and FDII. Additionally, in 2025, we recorded tax benefits of $10.8 million related to tax reserves in foreign jurisdictions. In 2024, the rate was impacted by a U.S. Tax Court ruling in Varian Medical Systems, Inc. v. Commissioner, issued on August 26, 2024. The ruling related to the U.S. taxation of deemed foreign dividends in the transition year of the Tax Act (our fiscal 2018). As a result, we recorded a $14.4 million benefit for additional foreign tax credits that became available to us. These benefits were offset by a tax expense of $4.6 million related to a tax reserve in a foreign jurisdiction. Additionally in 2023, our results include tax expense of $21.8 million relating to an uncertain tax position regarding transfer pricing in a foreign jurisdiction. Our rate was also impacted by non-deductible imputed interest related to the deferred payment on the acquisition of ServiceMax, Inc.As of September 30, 2025 and 2024, income taxes payable and income tax accruals recorded on the accompanying Consolidated Balance Sheets were $179.1 million ($28.7 million