Company: IPGP
Filing Date: 2025-02-20
Form Type: 10-K
Source: 0001111928-25-000023
Chunk: 47

Company: IPG PHOTONICS CORP
Filing Date: 2025-02-20
Form: 10-K
Item: Item 16
Chunk 47
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3,360 — 1,005 Federal and state tax credits(8,723)(6,375)(5,238)Foreign investment tax credit— — (9,559)Change in reserves, including interest and penalties(2,866)2,379 (3,355)Change in valuation allowance6,470 (2,548)36,993 Other — net238 1,032 2,063 Provision for income taxes$19,638 $55,997 $72,589 

F-27

Table of ContentsIPG PHOTONICS CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)(In thousands, except share and per share data)

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities were as follows:Year Ended December 31,20242023Property, plant and equipment$(6,166)$(5,019)Intangible assets47,617 43,020 Inventory provisions42,760 46,808 Allowances and accrued liabilities1,880 951 Withholding and other taxes on intercompany dividends(3,360)(1,504)Other tax credits24,115 20,864 Deferred compensation20,728 22,682 Net operating loss carryforwards6,401 8,299 Valuation allowance(33,150)(48,821)Net deferred tax assets$100,825 $87,280 The Company accrues taxes on dividend distributions to the extent that foreign subsidiaries have cash in excess of their operational needs.  The Company has recorded $3,360 and $1,504 as a deferred tax liability on December 31, 2024 and 2023, respectively, for certain withholding and dividend taxes related to possible future distributions of excess cash from certain non-U.S. subsidiaries to their respective parent companies. In both 2024 and 2023, the German subsidiary paid a dividend to the U.S. parent company of $80,282 and $107,941, respectively. There were no federal or withholding taxes due on the distributions from Germany to the U.S., but in both years the Company accrued a nominal amount of state tax relating to the distribution. With regard to the other non-U.S. subsidiaries, the Company continues to consider the earnings from these entities to be indefinitely reinvested to the extent the cash balance in each subsidiary is not greater than the