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
August 2, 2026, and August 3, 2025.
| | | | | | | |
|
Reporting Period
|
|
U.S. Statutory
Tax Rates
|
|
Photronics
Effective Tax
Rates
|
|
Primary Reasons for
Differences
|
| |
|
|
|
|
|
|
|
Three
months ended August 2, 2026
|
|
21.0% |
|
20.0% |
|
Tax credits in a non-U.S.
jurisdiction more than offset the impact of higher statutory tax rates and
changes in uncertain tax positions in non-U.S. jurisdictions.
|
| |
|
|
|
|
|
|
|
Three
months ended August 3, 2025
|
|
21.0% |
|
24.8% |
|
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.
|
| |
|
|
|
|
|
|
|
Nine
months ended August 2, 2026
|
|
21.0% |
|
19.6% |
|
Tax credits in a non-U.S.
jurisdiction more than offset the impact of higher statutory tax rates and
changes in uncertain tax positions in non-U.S. jurisdictions.
|
| |
|
|
|
|
|
|
|
Nine months ended August 3, 2025
|
|
21.0% |
|
23.5% |
|
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 the Company's expectations could have a material impact on the
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.
| | | | | | | | |
| |
|
August 2,
2026
| |
|
October 31,
2025
| |
|
Unrecognized tax benefits
related to uncertain tax positions
|
| $ | 14,108 | |
| $ | 11,379 | |
|
Unrecognized tax benefits
that, if recognized, would impact the effective tax rate
|
| $ | 14,108 | |
| $ | 11,379 | |
|
Accrued interest and
penalties related to uncertain tax positions
|
| $ | 809 | |
| $ | 551 | |
|