Quarterly report pursuant to Section 13 or 15(d)

INCOME TAXES

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INCOME TAXES
3 Months Ended
Mar. 31, 2022
Income Tax Disclosure [Abstract]  
INCOME TAXES

NOTE 16 - INCOME TAXES

 

The Company records its interim tax provision based upon a projection of the Company’s annual effective tax rate (“AETR”). This AETR is applied to the year-to-date consolidated pre-tax income to determine the interim provision for income taxes before discrete items. The Company updates the AETR on a quarterly basis as the pre-tax income projections are revised and tax laws are enacted. The effective tax rate (“ETR”) each period is impacted by a number of factors, including the relative mix of domestic and foreign earnings and adjustments to recorded valuation allowances. The currently forecasted ETR may vary from the actual year-end due to the changes in these factors.

 

    2021     2022  
    Three Months Ended March 31,  
    2021     2022  
             
Domestic pre-tax book income/(loss)   $ (2,722 )   $ (2,919 )
Foreign pre-tax book income/(loss)     1,408       (711 )
Total income before income (loss) taxes     (1,314 )     (3,630 )
Income tax benefit (expense)     (473 )     703  
Total income (loss) after taxes   $ (1,787 )   $ (2,927 )
                 
Effective tax rate     (36.0 %)     19.4 %

 

For the three-month periods ended March 31, 2021 and 2022, the effective tax rate differed from the statutory tax rates primarily due to the mix of domestic and foreign earnings amongst taxable jurisdictions, recorded valuation allowances to fully reserve against deferred tax assets in non-Israel jurisdictions and certain discrete items.

 

On March 11, 2021, the President of the United States signed the American Rescue Plan Act (the “ARPA”) into law as a continuing response to the COVID-19 pandemic. The ARPA implemented new entity taxation provisions as well as extended unemployment benefits and related incentives to provide further economic relief to US businesses. The passage of the ARPA did not have a material impact to the Company nor its calculated AETR for the year.