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Income Taxes
 12 Months Ended
Dec. 31, 2022
Disclosure of income tax [Abstract]  
Income Taxes
30. INCOME TAXES
Components of Income Tax Expense
 20222021
Current tax expense (recovery)  
Recognized in profit or loss in current year$85,325 $134,947 
Adjustments recognized in the current year with respect to prior years(2,308)147 
 83,017 135,094 
Deferred tax expense (recovery)  
Deferred tax expense (recovery) recognized in the current year(34,184)14,194 
Adjustments recognized in the current year with respect to prior years366 56 
Derecognition of previously unrecognized deferred tax assets9,065 — 
Benefit from previously unrecognized losses, and other temporary differences— 508 
Impact of impairments on deferred tax assets and liabilities(3,825)— 
Decrease in deferred tax liabilities due to tax impact of NRV charge to inventory(15,321)(3,423)
 (43,899)11,335 
Income tax expense$39,118 $146,429 
Income tax expense differs from the amounts that would result from applying the Canadian federal and provincial income tax rates to earnings before income tax. These differences result from the items shown on the following table, which result in an effective tax rate that varies considerably from the comparable period. The factors which have affected the effective tax rate for the year ended December 31, 2022 and the comparable period of 2021 were changes in the recognition of certain deferred tax assets primarily due to the Dolores impairment, foreign exchange fluctuations, mining taxes paid, and withholding taxes on payments from foreign subsidiaries.
In the year ended December 31, 2022, as a result of terminating its arrangement agreement with Gold Fields Limited, Yamana was required to pay Gold Fields Limited a termination fee of $300 million. One-half of this amount was funded by the Company. The Company has treated this as a capital cost of acquiring Yamana Gold Inc., pursuant to the applicable Canadian income tax legislation. Since the Company controls the timing of the reversal of this deductible temporary difference, no deferred tax benefit could be recorded for this amount. The tax impact caused by this treatment effectively increased tax expense by $39.8 million in the current quarter.
The Company continues to expect that these and other factors will continue to cause volatility in effective tax rates in the future.
Reconciliation of Effective Income Tax Rate
 20222021
Earnings (loss) before taxes and non-controlling interest$(300,945)$244,991 
Statutory Canadian income tax rate27.00 %27.00 %
Income tax expense (recovery) based on above rates$(81,255)$66,148 
Increase (decrease) due to:
Non-deductible expenditures7,465 6,192 
Foreign tax rate differences(11,717)15,969 
Change in net deferred tax assets not recognized (1)
22,296 20,574 
Derecognition of deferred tax assets previously recognized (2)
50,356 — 
Effect of other taxes paid (mining and withholding)15,658 25,846 
Effect of foreign exchange on tax expense(21,541)14,337 
Non-taxable impact of foreign exchange6,310 (1,203)
Change in non-deductible portion of reclamation liabilities12,157 2,380 
Unrecognized tax benefit on termination fee related to the Yamana acquisition39,750 — 
Other(361)(3,814)
Income tax expense$39,118 $146,429 
Effective income tax rate(13.00)%59.77 %
(1)Includes deferred taxes related to amounts recorded in other comprehensive income for the year-end December 31, 2022 of $0.5 million with no amounts recognized in the comparative period.
(2)Attributable to the loss of attributes resulting from the Dolores impairment in Q2 2022 (Note 12).
Deferred tax assets and liabilities 
The following is the analysis of the deferred tax assets (liabilities) presented in the consolidated financial statements: 
 20222021
Net deferred tax liabilities, beginning of year$(128,832)$(117,461)
Recognized in net earnings in the year43,899 (11,335)
Recognized in other comprehensive income (loss) in year (1)
469 — 
Other6 (36)
Net deferred liabilities, end of year(84,458)(128,832)
Deferred tax assets55,879 55,953 
Deferred tax liabilities(140,337)(184,785)
Net deferred tax liabilities$(84,458)$(128,832)
(1)Deferred tax impact related to unrealized loss on long-term investment (see Note 13).
Components of deferred tax assets and liabilities 
The deferred tax assets (liabilities) are comprised of the various temporary differences, as detailed below: 
 20222021
Deferred tax assets (liabilities) arising from:  
Closure and decommissioning costs$23,482 $27,742 
Tax losses, resource pools and mining tax credits83,819 92,928 
Deductible Mexican mining taxes3,974 4,682 
Accounts payable and accrued liabilities26,920 22,119 
Trade and other receivables17,634 29,163 
Provision for doubtful debts and inventory adjustments3,136 (28,153)
Short-term investments(11,665)(7,941)
Mineral properties, plant, and equipment(217,255)(245,126)
Estimated sales provisions(19,263)(30,466)
Other temporary differences and provisions4,760 6,220 
Net deferred tax liabilities$(84,458)$(128,832)
At December 31, 2022, the net deferred tax liability above included the deferred tax asset of $83.8 million, which includes the benefits from tax losses ($28.1 million) and resource pools ($55.7 million). The decrease of $9.1 million in this deferred tax asset is mainly due to the slower than expected utilization of tax attributes against income from Timmins West and Bell Creek, which resulted in the de-recognition of the benefits associated with resource pools for these mines. The losses will begin to expire after the 2024 year end, if unused.
At December 31, 2021, the net deferred tax liability above included the deferred tax asset of $92.9 million, which includes the benefits from tax losses ($26.4 million) and resource pools ($66.5 million). The decrease in this deferred tax asset is mainly due to the unrealized losses on short-term investments. In prior years, the accumulated unrealized gains on short-term investments necessitated the recognition of this offsetting deferred tax asset. The current year's decrease in accumulated unrealized gains has resulted in a consequential reduction to this offsetting deferred tax asset. Since the accumulated unrealized gains decreased during 2021, the benefit associated with the offsetting losses was de-recognized. The losses will begin to expire after the 2024 year end, if unused.
Unrecognized deductible temporary differences, unused tax losses and unused tax credits 
Deductible temporary differences, unused tax losses and unused tax credits for which no deferred tax assets have been recognized are attributable to the following:
 20222021
Operating tax loss$383,231 $366,351 
Net capital tax loss36,817 35,801 
Resource pools and other tax credits (1)
87,012 49,230 
Financing fees1,368 1,050 
Mineral properties, plant, and equipment207,182 127,945 
Closure and decommissioning costs207,261 143,080 
Exploration and other expenses not currently deductible26,300 33,837 
Intercompany debt23,449 17,956 
Doubtful debt and inventory18,631 24,624 
Payroll and vacation accruals35,799 6,168 
Other temporary differences14,057 6,154 
 $1,041,107 $812,196 
(1)Includes tax credits which will begin to expire after 2027 year end, if unused.
Included in the above amounts are operating tax losses, which if not utilized will expire as follows:
At December 31, 2022
 CanadaUSPeruMexicoBarbadosArgentinaTotal
2023$— $360 $— $289 $70 $4 $723 
2024— 419 275 312 30 10 1,046 
2025 – and after342,244 10,980 271 2,320 318 25,329 381,462 
Total tax losses$342,244 $11,759 $546 $2,921 $418 $25,343 383,231 
At December 31, 2021      
 CanadaUSPeruMexicoBarbadosArgentinaTotal
2022$— $529 $156 $— $15 $3 $703 
2023— 360 — 207 60 5 632 
2024 – and after330,799 11,399 593 2,092 168 19,965 365,016 
Total tax losses$330,799 $12,288 $749 $2,299 $243 $19,973 $366,351 
Taxable temporary differences associated with investment in subsidiaries 
As at December 31, 2022, taxable temporary differences of $286.0 million (2021 – $282.0 million) associated with the investments in subsidiaries have not been recognized as the Company is able to control the timing of the reversal of these differences which are not expected to reverse in the foreseeable future.