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Income taxes | 12 Months Ended
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Dec. 31, 2014
Income Tax Disclosure [Abstract] |
Income taxes |
14. | Income taxes
The components of pretax income in consolidated companies for the years ended December 31, 2014, 2013 and 2012 are as follows:
|  | Year Ended December 31, |
|  | 2014 |  |  | 2013 |  |  | 2012 |
United States |  | $ | (10,848,050 | ) |  | $ | (1,641,203 | ) |  | $ | (753,531 | )
Brazil |  |  | 91,136,394 |  |  |  | 61,573,972 |  |  |  | 52,460,902 |
Argentina |  |  | 53,065,458 |  |  |  | 46,438,235 |  |  |  | 40,466,354 |
Venezuela |  |  | (31,360,284 | ) |  |  | 36,855,421 |  |  |  | 29,620,800 |
Mexico |  |  | 6,094,361 |  |  |  | 9,490,012 |  |  |  | 7,320,041 |
Other Countries |  |  | 13,707,942 |  |  |  | 10,393,007 |  |  |  | 11,102,960 |
|  | $ | 121,795,821 |  |  | $ | 163,109,444 |  |  | $ | 140,217,526 |
Income / asset tax is composed of the following:
|  | Year Ended December 31, |
|  | 2014 |  |  | 2013 |  |  | 2012 |
Current: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 2,120 |  |  | $ | — |  |  | $ | — |
Foreign |  |  | 66,786,496 |  |  |  | 49,488,472 |  |  | $ | 39,371,170 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | 465,277 |  |  |  | 799,166 |  |  |  | 998,536 |
Foreign |  |  | (18,110,844 | ) |  |  | (4,913,379 | ) |  |  | (1,586,024 | )
|  |  | (17,645,567 | ) |  |  | (4,114,213 | ) |  |  | (587,488 | )
Income Tax: |  |  | 49,143,050 |  |  |  | 45,374,259 |  |  |  | 38,783,682 |
Foreign asset tax |  |  | — |  |  |  | 208,922 |  |  |  | 87,697 |
Income / asset tax expense |  | $ | 49,143,050 |  |  | $ | 45,583,181 |  |  | $ | 38,871,379 |
The following is a reconciliation of the difference between the actual provision for income taxes and the provision computed by applying the blended income tax rate for 2014, 2013 and 2012 to income before taxes:
|  | Year Ended December 31, |
|  | 2014 |  |  | 2013 |  |  | 2012 |
Net income before income tax |  | $ | 121,795,821 |  |  | $ | 163,109,444 |  |  | $ | 140,217,526 |
Weighted average income tax rate |  |  | 33 | % |  |  | 34 | % |  |  | 33 | %
Income tax expense at blended tax rate |  | $ | 40,783,129 |  |  | $ | 55,241,195 |  |  | $ | 46,593,938 |
Permanent differences: |  |  |  |  |  |  |  |  |  |  |  |
Federal and assets taxes |  |  | 3,527 |  |  |  | — |  |  |  | — |
Transfer Pricing |  |  | 616,101 |  |  |  | — |  |  |  | — |
Non-deductible tax |  |  | 258,153 |  |  |  | — |  |  |  | — |
Non-deductible expenses |  |  | 2,310,535 |  |  |  | 1,777,180 |  |  |  | 1,657,662 |
Dividend distributions |  |  | 4,221,176 |  |  |  | 1,414,915 |  |  |  | 847,798 |
Impairment of Venezuelan long-lived assets |  |  | 14,734,001 |  |  |  | — |  |  |  | — |
Non-taxable income (*) |  |  | (9,564,540 | ) |  |  | (12,321,790 | ) |  |  | (9,852,468 | )
Currency translation |  |  | (5,217,696 | ) |  |  | (1,552,169 | ) |  |  | (1,213,340 | )
Change in valuation allowance |  |  | 1,094,214 |  |  |  | 736,910 |  |  |  | 572,790 |
Business Combination |  |  | (40,469 | ) |  |  | 34,706 |  |  |  | — |
True up |  |  | (55,081 | ) |  |  | 43,312 |  |  |  | 177,302 |
Income tax expense |  | $ | 49,143,050 |  |  | $ | 45,374,259 |  |  | $ | 38,783,682 |
(*) | Includes Argentine Tax holiday described in Note 2 “Income and asset tax”
Deferred tax assets and liabilities are recognized for the future tax consequences of differences between the carrying amounts of assets and liabilities and their respective tax bases using enacted tax rates in effect for the year in which the differences are expected to reverse. The following table summarizes the composition of deferred tax assets and liabilities for the years ended December 31, 2014 and 2013:
|  | December 31, 2014 |  |  | December 31, 2013 |
Deferred tax assets |  |  |  |  |  |  |  |
Allowance for doubtful accounts |  | $ | 8,278,013 |  |  | $ | 8,210,283 |
Unrealized net losses on investments |  |  | 42,783 |  |  |  | — |
Property and equipment |  |  | 2,636,124 |  |  |  | 147,263 |
Accounts payable and accrued expenses |  |  | 953,842 |  |  |  | 2,014,026 |
Payroll and social security payable |  |  | 5,407,562 |  |  |  | 3,960,481 |
Foreign exchange effect |  |  | 7,526,669 |  |  |  | 22,714 |
Customer lists |  |  | — |  |  |  | 47,929 |
Taxes payable |  |  | 354,272 |  |  |  | 1,058,659 |
Goodwill |  |  | 519,432 |  |  |  | — |
Provisions |  |  | 4,946,080 |  |  |  | 3,553,360 |
Foreign tax credit |  |  | 4,327,796 |  |  |  | 668,659 |
Tax loss carryforwards |  |  | 2,611,877 |  |  |  | 2,451,524 |
Total deferred tax assets |  |  | 37,604,450 |  |  |  | 22,134,898 |
Valuation allowance |  |  | (4,531,232 | ) |  |  | (3,089,113 | )
Total deferred tax assets, net |  |  | 33,073,218 |  |  |  | 19,045,785 |
|  | December 31, 2014 |  |  | December 31, 2013 |
Total deferred tax assets, net |  |  | 33,073,218 |  |  |  | 19,045,785 |
Deferred tax liabilities |  |  |  |  |  |  |  |
Unrealized net gains on investments |  |  | — |  |  |  | (10,767 | )
Property and equipment |  |  | (3,233,145 | ) |  |  | (2,883,458 | )
Customer lists |  |  | (2,618,827 | ) |  |  | (45,963 | )
Non compete agreement |  |  | (265,670 | ) |  |  | (26,019 | )
Outside basis dividends |  |  | (4,327,796 | ) |  |  | (668,659 | )
Trademarks |  |  | (1,577,422 | ) |  |  | (1,693,256 | )
Convertible notes and Capped Call |  |  | (8,367,701 | ) |  |  | — |
Other liabilities |  |  | — |  |  |  | (11,237 | )
Total deferred tax liabilities |  |  | (20,390,561 | ) |  |  | (5,339,359 | )
Net deferred tax assets |  | $ | 12,682,657 |  |  | $ | 13,706,426 |
The total amount of $12,682,657 for the year ended December 31, 2014, is disclosed in the consolidated balance sheet as current asset, non-current asset, current liability and non-current liability amounting to $11,519,522, $21,553,696, $1,644,706 and $18,745,855, respectively. The total amount of $13,706,426 for the year ended December 31, 2013, is disclosed in the consolidated balance sheet as current asset, non-current asset and non-current liability amounting to $16,030,880, $3,014,905 and $5,339,359, respectively. As of December 31, 2014, consolidated loss carryforwards for income tax purposes were $8,755,535. If not utilized, tax loss carryforwards will begin to expire as follows:
2016 |  | $ | 36,411 |
2017 |  |  | 4,794 |
2018 |  |  | 39,327 |
Thereafter |  |  | 5,753,888 |
Without due dates |  |  | 2,921,115 |
Total |  | $ | 8,755,535 |
At the applicable tax rates, the above loss carryforwards amount to a tax loss carryforward of $2,611,877 that the Company estimates will be starting to use in 2016. During the year ended December 31, 2014, the Company reduced $63,473 related to the valuation allowance of certain subsidiaries, acquired in 2008. In addition, during that same year, the Company increased the valuation allowance relating to Argentine operation by $442,903, as a consequence of the assessment of the recoverability of certain deferred tax assets in such jurisdiction. During the year ended December 31, 2013, the Company reduced $156,851 related to valuation allowance of certain subsidiaries, acquired in 2008. In addition, during that same year, the Company increased the valuation allowance relating to Argentine operation by $290,561 as a consequence of the assessment of the recoverability of certain deferred tax assets in such jurisdiction. During the year ended December 31, 2012, the Company reversed $240,653 related to certain foreign and domestic valuation allowances based on the assessment that it was more likely than not that the deferred tax asset would be realized. The Company has not considered $96.7 million of the non-U.S. subsidiaries’ undistributed earnings as of December 31, 2014 in calculating deferred income taxes. In determining the amount of non-U.S. subsidiaries undistributed earnings for that calculation, the Company does not consider a portion of the non-U.S. subsidiaries earnings as of December 31, 2014 to be subject to U.S. federal income tax purposes because such earnings are intended to be indefinitely reinvested in its international operations and potential acquisitions related to those operations. Upon distribution of those earnings in the form of dividends or otherwise, the Company would be subject to U.S. income taxes if such distribution exceeds available foreign tax credits. It is not practicable to determine the income tax liability that might be incurred if these earnings were to be distributed. The Company does not expect a material impact in any repatriation of undistributed earnings of foreign subsidiaries on its operations since the taxable domestic gains generated by any dividend distributions will be mostly offset with foreign tax credits that arise from income tax paid in its foreign operations, which the Company is allowed to compute for domestic income tax purposes.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 + Details
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