Note 12 - Income Taxes |
6 Months Ended |
|---|---|
Jun. 30, 2024 | |
| Notes to Financial Statements | |
| Income Tax Disclosure [Text Block] |
12. INCOME TAXES
VAALCO and its domestic subsidiaries file a consolidated U.S. income tax return. Certain foreign subsidiaries also file tax returns in their respective local jurisdictions that include Canada, Egypt, Equatorial Guinea, Gabon and Cote d'Ivoire.
The foreign taxes payable are attributable to Gabon as of the three months ended June 30, 2024 and 2023.
The Company’s effective tax rate for the three months ended June 30, 2024 and 2023, excluding the impact of discrete items, was 43.78% and 68.42%, respectively. The Company’s effective tax rate for the six months ended June 30, 2024 and 2023, excluding the impact of discrete items, was 54.58% and 63.32%, respectively. For the three and six months ended June 30, 2024 and 2023, the Company’s overall effective tax rate was primarily impacted by tax rates in foreign jurisdictions higher than the US statutory rate and by non-deductible items associated with operations.
For the three months ended June 30, 2024, the income tax expense of $9.3 million includes a $1.1 million unfavorable oil price adjustment as a result of the change in value of the government of Gabon's allocation of Profit Oil between the time it was produced and the time it was taken in-kind. After excluding this impact, income taxes were $10.4 million for the period. For the six months ended June 30, 2024, the income tax expense of $31.5 million includes a $0.6 million unfavorable oil price adjustment as a result of the change in value of the government of Gabon's allocation of Profit Oil between the time it was produced and the time it was taken in-kind. After excluding this impact, income taxes were $30.9 million for the period.
As of June 30, 2024, the Company had no material uncertain tax positions. The Company’s policy is to recognize potential interest and penalties related to unrecognized tax benefits as a component of income tax expense. |