NOTE 10 - INCOME TAXES
The Company calculates its provision for income taxes at the end of each interim reporting period on the basis of an estimated annual effective tax rate adjusted for tax items that are discrete to each period. The table below sets forth the primary reasons that the Company’s effective income tax rates differed from the U.S. statutory tax rates in effect during the periods ended May 3, 2026, and May 4, 2025.
|
Reporting Period
|
|
U.S. Statutory
Tax Rates
|
|
Photronics
Effective Tax
Rates
|
|
Primary Reasons for Differences
|
|
|
|
|
|
|
|
|
Three months ended May 3, 2026
|
|
21.0% |
|
19.7% |
|
Non-U.S. pre-tax income being taxed at higher statutory rates in the non-U.S. jurisdictions, and changes in uncertain tax positions in non-U.S. jurisdictions have been more than offset by the impact of tax credit in a non-U.S.
jurisdiction.
|
| |
|
|
|
|
|
|
|
Three months ended May 4, 2025
|
|
21.0% |
|
19.1% |
|
Non-recognition of the tax benefit of losses that, in certain jurisdictions, have been offset by valuation allowances, non-U.S. pre-tax income being taxed at higher statutory rates in the non-U.S. jurisdictions, and changes in uncertain
tax positions in non-U.S. jurisdictions.
|
| |
|
|
|
|
|
|
|
Six months ended May 3, 2026
|
|
21.0% |
|
19.4% |
|
Non-U.S. pre-tax income being taxed at higher statutory rates in the non-U.S. jurisdictions, and changes in uncertain tax positions in non-U.S. jurisdictions have been more than offset by the impact of tax credit in a non-U.S.
jurisdiction.
|
| |
|
|
|
|
|
|
|
Six months ended May 4, 2025
|
|
21.0% |
|
23.0% |
|
Non-recognition of the tax benefit of losses that, in certain jurisdictions, have been offset by valuation allowances, non-U.S. pre-tax income being taxed at higher statutory rates in the non-U.S. jurisdictions, and changes in uncertain
tax positions in non-U.S. jurisdictions.
|
Uncertain Tax Positions
Although the timing of reversal of uncertain tax positions may be indeterminate at this time, the Company believes the resolution of these uncertainties in a manner inconsistent with our expectations could have a material impact on our results of operations and financial condition. Resolution of these uncertain tax positions may result from either or both the lapses of statutes of limitations and tax settlements. The Company is no longer subject to tax authority examinations in the U.S., major foreign, or state tax jurisdictions for years prior to fiscal year 2019. The table below presents information on unrecognized tax benefits as of the balance sheet dates.
| |
|
May 3,
2026
|
|
|
October 31,
2025
|
|
|
Unrecognized tax benefits related to uncertain tax positions
|
|
$
|
13,200 |
|
|
$
|
11,379 |
|
|
Unrecognized tax benefits that, if recognized, would impact the effective tax rate
|
|
$
|
13,200 |
|
|
$
|
11,379 |
|
|
Accrued interest and penalties related to uncertain tax positions
|
|
$
|
729 |
|
|
$
|
551 |
|
|