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INCOME TAX AND SOCIAL CONTRIBUTION
 12 Months Ended
Dec. 31, 2024
Income Tax And Social Contribution  
INCOME TAX AND SOCIAL CONTRIBUTION

 

37)INCOME TAX AND SOCIAL CONTRIBUTION

 

a)Calculation of income tax and social contribution charges

 

     
  R$ thousands
Year ended December 31
2024 2023 2022
Income before income tax and social contribution 16,900,514 10,208,351 24,621,610
Total burden of income tax (25%) and social contribution (20%) at the current rates (7,605,231) (4,593,758) (11,079,725)
Effect of additions and exclusions in the tax calculation:      
Earnings (losses) of associates and joint ventures 689,213 945,756 610,167
Interest on shareholders’ equity 5,077,509 5,089,859 4,577,308
Other amounts (1) 2,480,148 2,852,557 2,727,410
Income tax and social contribution for the period 641,639 4,294,414 (3,164,840)
Effective rate 3.8% 42.1% (12.9%)
(1)Primarily, includes: (i) the equalization of the effective rate of financial companies except banks, insurance companies and non-financial companies, in relation to that shown; and (ii) the incentivized deductions.

  

b)Composition of income tax and social contribution in the consolidated statement of income

 

     
  R$ thousands
Year ended December 31
2024 2023 2022
Current taxes:      
Income tax and social contribution expense (7,414,511) (6,622,719) (4,854,205)
Deferred taxes      
Constitution/realization in the period on temporary additions and exclusions 8,194,223 11,152,253 1,352,590
Use of opening balances of:      
Social contribution loss (168,131) (148,548) (44,551)
Income tax loss (202,260) (176,932) (45,106)
Addition for:       
Social contribution loss 69,624 34,413 78,056
Income tax loss 162,694 55,947 348,376
Total deferred tax benefit 8,056,150 10,917,133 1,689,365
Income tax benefit / (expense) 641,639 4,294,414 (3,164,840)

 

c)Deferred income tax and social contribution presented in the consolidated statement of financial position
       
  R$ thousands
Balance on December 31, 2023 Amount recorded Amount realized Balance on December 31, 2024
Provisions for credit losses  59,099,785  16,581,669 (8,155,178)  67,526,276
Civil provisions  3,778,420  355,631 (706,320)  3,427,730
Tax provisions  3,241,356  290,403 (103,261)  3,428,498
Labor provisions  2,068,013  278,344 (1,180,385)  1,165,970
Impairment of securities and investments  3,249,695  1,586,509 (1,288,999)  3,547,205
Non-financial assets held for sale  735,678  193,066 (229,410)  699,334
Adjustment to fair value of securities  270,017  3,592 (257,796)  15,813
Amortization of goodwill  403,841  15,589 (23,386)  396,044
Other  5,356,240  3,290,060 (2,765,888)  5,880,412
Total deductible taxes on temporary differences  78,203,042  22,594,863 (14,710,623)  86,087,282
Income tax and social contribution losses in Brazil and overseas  18,893,423  232,318 (370,391)  18,755,350
Subtotal  97,096,465  22,827,181 (15,081,014)  104,842,632
Adjustment to fair value of securities at fair value through other comprehensive income  1,180,023  4,810,633 (3,634,302)  2,356,354
Total deferred tax assets (1)  98,276,488  27,637,814 (18,715,316)  107,198,986
Deferred tax liabilities (1)  7,365,091  663,702 (973,685)  7,055,108
Net deferred taxes (1)  90,911,397  26,974,112 (17,741,631)  100,143,878

 

 

  R$ thousands
Balance on December 31, 2022 Amount recorded Amount realized Balance on December 31, 2023
Provisions for credit losses  51,069,942  17,996,746 (9,966,903)  59,099,785
Civil provisions  3,509,402  685,455 (416,437)  3,778,420
Tax provisions  3,262,366  303,532 (324,545)  3,241,353
Labor provisions  2,686,567  359,617 (978,171)  2,068,013
Impairment of securities and investments  2,441,248  1,455,059 (646,612)  3,249,695
Non-financial assets held for sale  761,801  213,118 (239,241)  735,678
Adjustment to fair value of securities  80,520  208,065 (18,568)  270,017
Amortization of goodwill  406,655  20,870 (23,684)  403,841
Other  4,252,332  3,067,006 (1,963,098)  5,356,240
Total deductible taxes on temporary differences  68,470,833  24,309,468 (14,577,259)  78,203,042
Income tax and social contribution losses in Brazil and overseas  19,128,543  90,360 (325,480)  18,893,423
Subtotal  87,599,376  24,399,828 (14,902,739)  97,096,465
Adjustment to fair value of securities at fair value through other comprehensive income  3,767,052  413,331 (3,000,360)  1,180,023
Total deferred tax assets (1)  91,366,428  24,813,159 (17,903,099)  98,276,488
Deferred tax liabilities (1)  8,785,135  987,691 (2,407,735)  7,365,091
Net deferred taxes (1)  82,581,293  23,825,468 (15,495,364)  90,911,397
(1)Deferred income and social contribution tax assets and liabilities are offset in the statement of financial position within each taxable entity, which was a total of R$(5,548,220) thousand in 2024 (R$(5,757,564) thousand in 2023).

 

d)Expected realization of deferred tax assets on temporary differences and carry-forward tax losses

 

         
  On December 31, 2024 - R$ thousand
Temporary differences Carry-forward tax losses Total
Income tax Social contribution Income tax Social contribution
2025  7,759,849  6,088,210  170,393  93,196  14,111,648
2026  8,966,110  7,101,433  187,190  90,064  16,344,797
2027  7,531,727  5,968,641  156,330  58,439  13,715,137
2028  7,563,722  5,922,301  591,801  409,330  14,487,154
2029  6,065,862  4,706,850  1,002,763  756,229  12,531,704
2030  3,536,177  2,802,450  1,227,384  1,001,317  8,567,328
2031  2,546,685  2,011,892  1,596,397  1,301,212  7,456,186
2032  1,935,387  1,524,740  1,949,189  1,588,475  6,997,791
2033  1,544,402  1,163,226  2,340,983  1,922,001  6,970,612
2034  759,476  588,142  928,425  1,384,232  3,660,275
Total  48,209,397  37,877,885  10,150,855  8,604,495 104,842,632

 

The projection of realization of tax credits is an estimate and is not directly related to the expectation of accounting profits and contemplates the rules for deductibility of credit losses, established by Laws No. 14,467/22 and No. 15,078/24. 

 

e)Deferred tax liabilities

 

       
  R$ thousands
Balance on December 31, 2023 Amount constituted Amount realized Balance on December 31, 2024
Fair value adjustment to securities and derivative financial instruments 1,150,588 60,628 (768,077) 443,139
Difference in depreciation 616,829 190,634 (81,260) 726,203
Judicial deposit 1,787,400 251,639 (30,511) 2,008,528
Other 3,810,273 160,801 (93,837) 3,877,238
Total deferred tax liabilities 7,365,090 663,702 (973,685) 7,055,108

 

  R$ thousands
Balance on December 31, 2022 Amount constituted Amount realized Balance on December 31, 2023
Fair value adjustment to securities and derivative financial instruments 1,310,556 342,978 (502,946) 1,150,588
Difference in depreciation 434,496 191,982 (9,649) 616,829
Judicial deposit 2,735,883 276,277 (1,224,760) 1,787,400
Other 4,304,200 176,453 (670,380) 3,810,273
Total deferred tax liabilities 8,785,135 987,690 (2,407,735) 7,365,090

 

f)Income tax and social contribution on adjustments recognized directly in other comprehensive income

 

           
  R$ thousands
On December 31, 2024 On December 31, 2023
Before tax Tax (expense)/ benefit Net of tax Before tax Tax (expense)/ benefit Net of tax
Debt instruments at fair value through other comprehensive income (10,616,772) 4,351,914 (6,264,858) 8,792,390 (3,725,426) 5,066,964
Exchange differences on translations of foreign operations 759,955 (341,980) 417,975 21,664 (9,749) 11,915
Other 4,429,936 (1,993,471) 2,436,465 (2,183,307) 982,488 (1,200,819)
Total (5,426,881) 2,016,463 (3,410,418) 6,630,746 (2,752,686) 3,878,060