Investor Presentaiton
23. Current and deferred income tax and
social contribution
Accounting policy
The income tax and social contribution expense for the period comprises
current and deferred taxes. Taxes on profit are recognized in the statement
of income, except to the extent that they relate to items recognized directly
in equity. In such cases, the taxes are also recognized in comprehensive
income or directly in equity.
The current and deferred income tax and social contribution is calculated
on the basis of the tax laws enacted or substantively enacted at the ba-
lance sheet date in the countries where the entities operate and generate
taxable income. Management periodically evaluates positions taken by
the Company in income tax returns with respect to situations in which the
applicable tax regulation is subject to interpretation. It establishes provision
where appropriate on the basis of amounts expected to be paid to the tax
authorities.
Income tax and current social contribution are shown net, by taxpayer en-
tity, in liabilities when there are amounts to be paid, or in assets when the
amounts paid in advance exceed the total due on the balance sheet date.
Deferred tax assets are recognized only to the extent it is probable that fu-
ture taxable profit will be available against which the temporary differences
and/or tax losses can be utilized.
Deferred income tax assets and liabilities are presented net in the balance
sheet when there is a legal right and the intention to offset them upon the
calculation of current taxes, generally related to the same legal entity and
the same taxation authority. Thus, deferred tax assets and liabilities in diffe-
rent entities or in different countries are presented separately, and not net.
The Company and its subsidiaries are subject to income taxes in all countries
in which it operates. The provision for income tax is calculated individually
by the entity based on tax rates and rules effective at the entity's location.
The Company and its subsidiaries also recognizes liabilities for anticipated
tax audit issues based on estimates of whether additional taxes will be due.
Where the final tax outcome of these matters is different from the amou-
nts that were initially recorded, such differences will have an impact on the
current and deferred tax assets and liabilities in the period in which the
determination is made.
(a) Reconciliation of Corporate Income Tax (IRPJ) and Social
Contribution on Net Income (CSLL) expenses
The amounts of income tax and social contribution shown in the result for
the periods ended on December 31 show the following reconciliation based
on the Brazilian nominal rate:
Profit (loss) before income tax and social contribution
Standard rates
Income tax and social contribution at standard rates
Adjustments for the calculation of income tax and social
contribution at effective rates
Credit referring to the non-levy of income tax and social
contribution on undue payment (i)
Equity
Difference related to the rate of companies abroad
Tax loss and negative basis without deferred tax constitution
Impairment of goodwill without deferred constitution
2021
10,317
34%
(3,508)
2020
(1,467)
34%
499
252
199
247
181
(45)
(607)
(607)
(351)
Impairment of fixed assets without deferred tax constitution
(ii)
105
(524)
Recognition of deferred charges on exchange variation of
fixed assets
(157)
(356)
Addition of Profit abroad IN 1520/14
(288)
(381)
IR credit non-external payment IN 1520/14
189
280
Deferred tax impairment
(42)
(98)
244
(249)
(3,432)
(1,585)
Permanent, net additions (exclusions)
IRPJ and CSLL calculated
=
167View entire presentation