Income Taxes (Notes)
|3 Months Ended|
Dec. 27, 2015
|Income Tax Disclosure [Abstract]|
Note 3. Income Taxes
The Company estimates its annual effective income tax rate to be approximately 17% for fiscal 2016, which is less than its 19% effective income tax rate for fiscal 2015. Tax benefits from foreign income taxed at rates lower than rates in the United States are expected to be approximately 16% in fiscal 2016, compared to 14% in fiscal 2015. During the first quarter of fiscal 2016, the United States government permanently reinstated the federal research and development tax credit retroactively to January 1, 2015. As a result of the reinstatement, the Company recorded a tax benefit of $79 million in the first quarter of fiscal 2016 related to fiscal 2015. The annual effective tax rate for fiscal 2015 reflected the United States federal research and development tax credit generated through December 31, 2014, the date on which the credit previously expired. Further, the China National Development and Reform Commission (NDRC) imposed a fine of $975 million on the Company in the second quarter of fiscal 2015, which was not deductible for tax purposes and was substantially attributable to a foreign jurisdiction. The effective tax rate of 13% for the first quarter of fiscal 2016 was less than the estimated annual effective tax rate of 17% primarily as a result of the retroactive reinstatement of the United States federal research and development tax credit.
Unrecognized tax benefits were $113 million and $40 million at December 27, 2015 and September 27, 2015, respectively. Certain of the Company’s existing tax positions are expected to continue to generate an increase in unrecognized tax benefits through fiscal 2016.
The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.
Reference 1: http://www.xbrl.org/2003/role/presentationRef