SunOpta Inc. Income Taxes Disclosure

15. Income Taxes

Earnings (Loss) from Continuing Operations Before Income Taxes

 

Income Tax Expense (Benefit)

 

Reconciliation of Effective Tax Rate

The following table is a reconciliation of the Canadian federal statutory tax rate to the effective tax rate for the year ended January 3, 2026:

The following table is a reconciliation of the Canadian combined federal and provincial statutory tax rate to the effective tax rate for the years ended December 28, 2024 and December 30, 2023:

Cash Income Taxes

For the year ended January 3, 2026, income tax refunds received, net of income tax payments made, which all pertained to the U.S., totaled $3.1 million. Total income taxes paid were $0.4 million and $0.6 million for the years ended December 28, 2024 and December 30, 2023, respectively.

Deferred Income Taxes

The tax effects of temporary differences giving rise to deferred income tax assets and liabilities are as follows:

 

Tax Attributes

The following table details the Company's tax attributes as at January 3, 2026, for which it has recorded deferred tax assets:

Undistributed Earnings

As the undistributed earnings of the Company's non-Canadian subsidiaries are considered to be indefinitely reinvested, no provision for deferred taxes has been provided thereon. 

Uncertain Tax Positions

For the years ended January 3, 2026, December 28, 2024 and December 30, 2023, the Company did not identify any material uncertain tax positions or recognize any related tax benefits. The Company believes it has adequately examined its tax positions taken or expected to be taken in a tax return; however, amounts asserted by taxing authorities could differ from the Company's positions. Accordingly, additional provisions on federal, provincial, state, and foreign tax-related matters could be recorded in the future as revised estimates are made or the underlying matters are settled or otherwise resolved.

Tax Assessments

The number of years with open tax audits varies depending on the tax jurisdiction. The Company's major taxing jurisdictions are the U.S. (including multiple states) and Canada (Ontario). The Company's 2021 through 2024 tax years (and any tax year for which available non-capital loss carryforwards were generated up to the amount of non-capital loss carryforwards) remain subject to examination for U.S. federal tax purposes, and tax years 2018 through 2024 remain subject to examination for Canadian federal tax purposes. There are other ongoing audits in various other jurisdictions that are not considered material to the Company's consolidated financial statements.

Pillar Two Taxation

The Organization for Economic Co-operation and Development has introduced the Pillar Two framework, which establishes a global minimum corporate tax rate of 15% for multinational enterprises with consolidated annual revenues of €750 million or more ("Pillar Two"). During 2024, Canada enacted legislation to adopt Pillar Two effective for fiscal years beginning on or after December 31, 2023. For the years ended January 3, 2026 and December 28, 2024, the incorporation of Pillar Two did not have a material impact on the Company's effective tax rate.