Company: PATH
Filing Date: 2025-03-24
Form Type: 10-K
Source: 0001734722-25-000007
Chunk: 113

Company: UiPath, Inc.
Filing Date: 2025-03-24
Form: 10-K
Item: Item 8
Chunk 113
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 (inclusive of penalties and interest) related to income taxes, which would impact the effective tax rate if recognized. Of this amount, the total liability pertaining to uncertain tax positions was $0.5 million, excluding interest and penalties. Our policy is to recognize interest and penalties associated with tax matters as part of the income tax provision. During fiscal year 2025, the penalties and interest recorded related to uncertain tax positions was not material. Our tax positions are subject to income tax audits in multiple tax jurisdictions globally. Our estimate of the potential outcome of any uncertain tax position is subject to management's assessment of the relevant risks, facts, and circumstances existing at that time. We believe that we have provided adequate reserves for our income tax uncertainties in all open tax years. However, our future results may include adjustments to estimates in the period the audits are settled, which may impact our effective tax rate. Currently, our India subsidiary is 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 January 2018 through January 2022. During fiscal year 2025, the Romanian ANAF completed a corporate income tax audit for the period from January 2018 through January 2022. Certain deductions have been disallowed, resulting in a proposed reduction of NOLs of approximately $66.7 million. We are appealing $64.3 million of the disallowance through litigation, $25.4 million of which we believe more likely than not will not be sustained. As a result, as of January 31, 2025, the Romania DTA and the corresponding valuation allowance has been reduced by $25.4 million.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. These negotiations are still underway, and the authorities are in the process of determining the cost sharing allocations between the respective countries, and the ultimate outcomes remain uncertain. However, after evaluating recent developments in the transfer pricing negotiation between the U.S. and Romania, in anticipation of the agreement, during fiscal year 2025, we recorded a $33.8 million decrease in the U.S. DTA and the corresponding valuation allowance, representing the unrecognized tax benefit related to the U.S.-Romania bilateral advance pricing agreement. We also recorded a $16.0 million increase in the Romania DTA and its related valuation allowance.