General Motors 2012 Annual Report Download - page 156

GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Other Matters
The ability to utilize certain of the U.S. tax attributes in future tax periods could be limited by Section 382 of the Internal Revenue
Code. On November 1, 2010 we amended our certificate of incorporation to minimize the likelihood of an ownership change
occurring for Section 382 purposes. We have net operating loss carryforwards in Germany through November 30, 2009 that, as a
result of reorganizations that took place in 2008 and 2009, were not recorded as deferred tax assets. Depending on the outcome of
European court decisions these loss carryforwards may be available to reduce future taxable income in Germany. In Australia we have
net operating loss carryforwards which are subject to meeting a “Same Business Test” requirement that we assess on a quarterly basis.
Income tax returns are filed in multiple jurisdictions and are subject to examination by taxing authorities throughout the world. We
have open tax years from 2002 to 2012 with various significant tax jurisdictions. These open years contain matters that could be
subject to differing interpretations of applicable tax laws and regulations as they relate to the amount, character, timing or inclusion of
revenue and expenses or the sustainability of income tax credits for a given audit cycle. Given the global nature of our operations
there is a risk that transfer pricing disputes may arise.
In the U.S. we have continuing responsibility for Old GM’s open tax years. Old GM’s federal income tax returns through the date
of the 363 Sale have been audited by the Internal Revenue Service. Audit closure in January 2013 of Old GM’s 2007, 2008 and 2009
federal income tax returns will result in no change to the amount of unrecognized tax benefits. The audit of our 2009 federal income
tax return was concluded in January 2013 and will result in no change to the amount of unrecognized tax benefits. In January 2013 the
U.S. Congress enacted federal income tax legislation including an extension of the research credit for tax years 2012 and 2013. As a
result, in the three months ending March 31, 2013, we will record an income tax benefit related to the 2012 research credit of
approximately $160 million.
In May 2012 a Brazilian income tax assessment was issued related to the 2007 tax year totaling $181 million including tax, interest
and penalties. We believe we have adequate reserves established. Proceedings may require that we deposit escrow funds in the future.
In March 2012 a Mexican income tax audit covering the 2004 tax year was concluded and an assessment, adjusted for inflation, of
$136 million including tax, interest and penalties was issued. The total 2002, 2003 and 2004 assessments, adjusted for inflation, at
December 31, 2012 including tax, interest and penalties is $309 million. We believe we have adequate reserves established. Payment
of any assessment is suspended during the proceedings through U.S. and Mexican competent authorities.
In the year ended December 31, 2011 certain issues were resolved relating to uncertain tax positions in jurisdictions which had full
valuation allowances. The resolution of these matters resulted in a $2.7 billion reduction to gross uncertain positions. No tax benefit
was recognized with respect to these reductions because the entities were in full valuation allowance jurisdictions or the amounts were
reserved in a prior period.
In June 2011 we settled a Brazilian income tax matter for $241 million that was reserved and disclosed in a prior period.
In November 2010 an agreement was reached with the Canadian government to resolve various income tax matters in the years
2003 through 2009. In the three months ended December 31, 2010 this resolution resulted in a tax benefit of $140 million including
interest.
At December 31, 2012 it is not possible to reasonably estimate the expected change to the total amount of unrecognized tax benefits
in the next twelve months.
General Motors Company 2012 ANNUAL REPORT 153