INCOME TAXES (Tables)
 12 Months Ended
Dec. 31, 2013
INCOME TAXES  
Schedule of current and deferred components of income tax expense

 

 

 
   Years ended December 31,  
 
   2011   2012   2013  

Current tax expense

                    

—PRC and Hong Kong

   $ 968   $ 5,295   $ 5,404  

—Japan

     78     41     61  

—U.S. 

     330     10     299  

—Singapore

     1,006     670     515  

—Australia

     —     91     1,239  

—Europe

     —     —     67  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

 

     2,382     6,107     7,585  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Deferred tax expense (benefit)

                    

—PRC and Hong Kong

     (881 )   (2,070 )   (293 )

—Japan

     (42 )   (102 )   (802 )

—U.S. 

     241     (2,486 )   (1,181 )

—Singapore

     18     (81 )   (276 )

—Australia

     —     (155 )   226  

—Europe

     —     (3 )   (291 )
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

 

     (664 )   (4,897 )   (2,617 )
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Income tax expense

   $ 1,718   $ 1,210   $ 4,968  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
               
Schedule of the preferential tax rates

 

 

Subsidiaries
  0%   10%   12.5%   15%  

Pactera Dalian(1)(9)

     —     2011 – 2013     —     —  

Pactera Shenzhen Systems(3)

     —     —     —     2011 – 2013  

Pactera Chengdu(1)

     —     —     —     2011 – 2013  

HiSoft Beijing(1)

     —     —     —     2011 – 2013  

Pactera Wuxi(2)

     2011     —     2012 – 2013     —  

HURO(1)

     —     —     —     2011 – 2013  

Pactera Jinxin(1)

     —     —     —     2012 – 2013  

Glory(1)

     —     —     —     2011 – 2013  

Pactera Beijing(4)

     —     2011 – 2012     —     2013  

Pactera Nanjing(5)

     —     —     2011 – 2013     —  

Pactera Shenzhen(6)

     2011     2013     2012     —  

Beijing DPC(7)

     —     —     —     2011 – 2013  

Pactera Shanghai(8)

     —     2011 – 2012     —     2013  

Sunwin(1)

     —     —     —     2012 – 2013  
(1)
The "High and New Technology Enterprise" (the "new HNTE") status obtained by Pactera Dalian, Pactera Chengdu, HiSoft Beijing, HURO and Glory in 2011, while Pactera Jinxin and Sunwin in 2012, under the Enterprise Income Tax Law (the "EIT Law") effective on January 1, 2008, are valid for three years and qualifying entities can re-apply for an additional three years provided their business operations continue to qualify for the new HNTE status.

(2)
Pactera Wuxi was certified as software enterprise in 2010. Starting from 2010, Pactera Wuxi is entitled to a two-year tax exemption followed by a three-year of 50% deduction of its income tax.

(3)
In 2010, Pactera Shenzhen Systems was certified as "Advanced Technology Service Enterprise" and entitled to an income tax rate of 15% from January 1, 2010 to December 31, 2013.

(4)
Pactera Beijing obtained the new HNTE in 2008 and the HNTE certificate was renewed in 2011. Pactera Beijing was further recognized as a "key software enterprise under the State plan" in 2012, which entitled it to a 10% preferential income tax rate in 2011 and 2012. For 2013, Pactera Beijing would enjoy the preferential income tax rate of 15% as HNTE.

(5)
Pactera Nanjing obtained the certificate of new setup software enterprise in 2009 and was entitled to an exemption of EIT from 2009 to 2010 and 50% reduction for the subsequent three years at the preferential tax rate of 12.5% from 2011 to 2013.

(6)
Pactera Shenzhen obtained the approved newly established IC design software enterprise and qualified software enterprise in 2010 and was entitled to an exemption of EIT in 2010 and 2011 and 50% reduction for the subsequent three years at the preferential tax rate of 12.5% from 2012 to 2014. It was further recognized as a "key software enterprise under the State plan" in 2013, which would entitle it to a 10% preferential income tax rate in 2013 and 2014.

(7)
Beijing DPC was qualified for the new HNTE and the certificate was renewed in 2012. As such, it is entitled to 15% tax rate from 2011 to 2013.

(8)
Pactera Shanghai was qualified as the new HNTE in December 2009, and was further recognized as a "key software enterprise under the State plan" in December 2009 and 2012, respectively, which entitled it to a 10% preferential income tax rate in 2009 through 2012. Pactera Shanghai obtained the advanced technology service enterprises certificate in 2010 and renewed the certificate in 2012, which makes it eligible for a 15% income tax rate in 2013.

(9)
Pactera Dalian was further recognized as a "key software enterprise under the State plan" in 2012 and 2013, respectively, which would entitle it to a 10% preferential income tax rate from 2011 to 2014.
Schedule of principal components of the Group's deferred income tax assets and liabilities

 

 

 
   Years ended December 31,  
 
   2011   2012   2013  

Deferred tax assets

                    

Gross

   $ 5,949   $ 16,829   $ 17,681  

Less: Valuation allowance

     (5,033 )   (4,596 )   (4,531 )
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total net deferred tax assets

     916     12,233     13,150  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Deferred tax assets—current:

                    

Allowance for doubtful accounts

     1,954     2,742     1,667  

Accrued expenses

     131     6,217     6,249  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total deferred taxes assets—current

     2,085     8,959     7,916  

Less: Valuation allowance

     (1,462 )   (19 )   (130 )
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net deferred tax assets—current, net

     623     8,940     7,786  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
               

Deferred tax assets—non-current:

                    

Net operating losses

     3,811     6,975     9,138  

Depreciation

     53     895     627  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total deferred taxes assets—non-current

     3,864     7,870     9,765  

Less: Valuation allowance

     (3,571 )   (4,577 )   (4,401 )
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net deferred tax assets—non-current, net

     293     3,293     5,364  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Current deferred tax liabilities:

                    

Depreciation

     (8 )   —     —  

Unbilled account receivables

     —     (411 )   (352 )
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Current deferred tax liabilities

     (8 )   (411 )   (352 )
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
               

Non-current deferred tax liabilities:

                    

Intangible assets

     (3,017 )   (11,145 )   (9,312 )

Depreciation

     (88 )   (116 )   (133 )
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Non-current deferred tax liabilities

   $ (3,105 ) $ (11,261 ) $ (9,445 )
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
               
Schedule of reconciliation between income tax expense computed by applying the PRC tax rate to income before income tax and the income tax expense

 

 

 
   Years ended December 31,  
 
   2011   2012   2013  

Tax expenses at statutory tax rate in PRC

   $ 5,029   $ 1,128   $ 3,184  

Permanent differences

     551     314     695  

Different tax jurisdictions

     306     3,253     6,556  

Tax holiday in the PRC

     (4,788 )   (3,102 )   (4,225 )

Change in valuation allowance

     861     (437 )   (65 )

Preferential tax refund

     —     —     (1,724 )

Other

     (241 )   54     547  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Income tax expense

   $ 1,718   $ 1,210   $ 4,968  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
               
Schedule of components of consolidated income before income tax expense as either domestic or foreign

 

 

 
   Years ended December 31,  
 
   2011   2012   2013  

Domestic (Cayman Islands)

   $ (7,125 ) $ (22,937 ) $ (26,246 )

Foreign (PRC)

     18,873     19,795     26,887  

Foreign (Others)

     8,368     7,654     12,096  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Income before income tax expense

   $ 20,116   $ 4,512   $ 12,737  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​