PRA GROUP INC

13. Income Taxes:

Income tax expense/(benefit) for the years ended December 31, 2023, 2022 and 2021 was comprised of the following (amounts in thousands):

A reconciliation of the Company's expected tax expense/(benefit) at the U.S. statutory federal tax rate to actual tax expense/(benefit) for the years ended December 31, 2023, 2022 and 2021, was as follows (amounts in thousands):

As of December 31, 2023 and 2022, the components of deferred tax assets and liabilities were as follows (amounts in thousands):

As of December 31, 2023 and 2022, the valuation allowance related mainly to net operating losses, capital losses and deferred interest expense in Norway and Luxembourg. The Company believes it is more likely than not that the results of future operations will generate sufficient taxable income to realize the remaining net deferred tax asset.

As of December 31, 2023, the Company had deferred tax assets related to federal, state and foreign net operating loss carryforwards of $159.7 million, and as of the same date, there were $58.0 million of valuation allowances recorded against those deferred tax assets. The federal net operating loss carryforward has an indefinite carryforward period, while the state and foreign net operating losses generally have afive to 20 year carryforward period and will expire if not utilized.

As of December 31, 2023, the cumulative unremitted earnings of the Company's international subsidiaries were approximately$217.3 million. The Company intends for predominantly all international earnings to be indefinitely reinvested in its international operations; therefore, recording deferred tax liabilities for such unremitted earnings is not required. If international earnings were repatriated or deemed repatriated due to intercompany loans, the Company may need to accrue and pay taxes, although foreign tax credits and exemptions may be available to partially reduce or eliminate income and withholding taxes. Any deemed repatriations from intercompany loans would be expected to have little or no tax impact. It is impracticable to determine the total amount of unrecognized deferred taxes with respect to these indefinitely reinvested earnings.

Uncertain Tax Positions

Aggregate changes in the balance of gross unrecognized tax benefits for the years ended December 31, 2023, 2022 and 2021 were as follows(amounts in thousands):

(1) Relates to international transactions and are primarily due to foreign exchange rate fluctuations.

As of December 31, 2023 and 2022, the total amount of after-tax unrecognized tax benefits that, if recognized, would affect the effective tax rate, was $20.5 million and $19.7 million, respectively. As of December 31, 2023 and 2022, the Company had accrued for potential interest and penalties related to unrecognized tax benefits in the amounts of $3.9 million and $3.0 million, respectively.

During the next 12 months, it is possible that international tax reserves will be reduced for audit settlements, however, the Company is unable to predict the outcome of those audits. As of December 31, 2023, the tax years subject to examination by the major federal, state and international taxing jurisdictions are 2014 and subsequent years.