Company: PATH
Filing Date: 2025-12-08
Form Type: 10-Q
Source: 0001734722-25-000050
Chunk: 99

Company: UiPath, Inc.
Filing Date: 2025-12-08
Form: 10-Q
Item: Part I, Item 8
Chunk 99
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 years. However, our future results may include adjustments to estimates in the period the audits are settled, which may impact our effective tax rate.Our Indian subsidiary is currently appealing the corporate income tax assessment of $2.1 million for the audit period of April 2019 through March 2021. It also has an open corporate income tax audit for the period from April 2022 through March 2024. Our Romanian subsidiary is currently appealing the corporate income tax audit decision for the period from January 2018 through January 2022. In addition, we have engaged in two bilateral transfer pricing negotiations for our transfer pricing model, one between the U.S. and Romania, and one between Japan and Romania. The U.S.-Romania negotiation is in its final stage, and we anticipate that an agreement will be reached in the next three months. During the nine months ended October 31, 2025, we recorded a $3.1 million decrease to the U.S. DTA and the corresponding valuation allowance, representing the unrecognized tax benefit related to the U.S.-Romania bilateral advance agreement. Further, during the nine months ended October 31, 2025 we also recorded a $5.5 million increase in the Romania DTA and the corresponding valuation allowance. The Japan-Romania negotiation is currently ongoing, and the ultimate outcome remains uncertain.On December 20, 2021, the Organization for Economic Co-operation and Development ("OECD") published the Pillar Two Model Rules defining the global minimum tax for multinational enterprises with an annual revenue above €750.0 million. The OECD has since issued administrative guidance providing transition and safe harbor rules around the implementation of the Pillar Two global minimum tax. Based on the current Pillar Two rules, we anticipate a qualified domestic minimum top-up tax ("QDMTT") of $1.0 million in Romania for the current fiscal year. 

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Table of ContentsUiPath, Inc.Notes to Condensed Consolidated Financial Statements (Continued)(unaudited)

The impact of the QDMTT was included when calculating the estimated annual effective tax rate for the current year. In June 2025, the G7 countries reached an understanding that U.S.-based parent groups would be excluded from the income inclusion rules and undertaxed profit rule under the OECD Pillar Two framework. The G7 understanding has not been implemented in the OECD framework or in local legislation. We are currently assessing the impact of the G7 understanding but do not expect a significant impact on our effective tax