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Income Taxes | 12 Months Ended
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Dec. 31, 2023
Disclosure of income tax [Abstract] |
Income Taxes | 31. INCOME TAXES
Components of Income Tax Expense
| 2023 | 2022
Current tax expense (recovery) |  |
Recognized in profit or loss in current year | $ | 132.7 |  | $ | 85.3 |
Adjustments recognized in the current year with respect to prior years | 0.2 |  | (2.3) |
| 132.9 |  | 83.0 |
Deferred tax expense (recovery) |  |
Deferred tax recovery recognized in the current year | (101.7) |  | (34.2) |
Adjustments recognized in the current year with respect to prior years | 3.4 |  | 0.4 |
Derecognition of previously recognized deferred tax assets | 3.7 |  | 9.0 |
Impact of impairments on deferred tax assets and liabilities | (3.4) |  | (3.8) |
Increase (decrease) in deferred tax liabilities due to tax impact of NRV charge to inventory | 11.2 |  | (15.3) |
| (86.8) |  | (43.9) |
Income tax expense | $ | 46.1 |  | $ | 39.1 |
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 income tax expense that varies considerably from the comparable period. The factors which have affected the effective tax rate for the year ended December 31, 2023 and the comparable period of 2022 were changes in the recognition of certain deferred tax assets (primarily related to the prior year's Dolores impairment, and the current year's impairment of Morococha and the Shahuindo plant), foreign exchange fluctuations, mining taxes paid, and withholding taxes on payments from foreign subsidiaries. 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
| 2023 | 2022
Earnings (loss) before taxes and non-controlling interest | $ | (58.8) |  | $ | (301.0) |
Statutory Canadian income tax rate | 27.00 | % | 27.00 | %
Income tax expense (recovery) based on above rates | $ | (15.9) |  | $ | (81.3) |
Increase (decrease) due to: |  |
Non-deductible expenditures | 3.2 |  | 7.4 |
Foreign tax rate differences | 2.7 |  | (11.7) |
Change in net deferred tax assets not recognized (1) | 66.3 |  | 22.3 |
Derecognition of deferred tax assets previously recognized (2) | — |  | 50.4 |
Effect of other taxes paid (mining and withholding) | 22.1 |  | 15.7 |
Effect of foreign exchange on tax expense | (36.0) |  | (21.5) |
Non-taxable impact of foreign exchange | 3.8 |  | 6.3 |
Change in non-deductible portion of reclamation liabilities | 1.9 |  | 12.2 |
Unrecognized tax benefit on termination fee related to the Yamana acquisition (3) | — |  | 39.8 |
Other | (2.0) |  | (0.5) |
Income tax expense | $ | 46.1 |  | $ | 39.1 |
(1)Includes deferred taxes recovery related to amounts recorded in other comprehensive income for the year-end December 31, 2023 of $0.5 million (2022 - $0.5 million deferred tax expense). (2)Attributable to the loss of attributes resulting from the Dolores impairment in Q2 2022 (Note 15). (3)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. 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 2022. The following is the analysis of the deferred tax assets (liabilities) presented in the Consolidated Financial Statements:
| 2023 | 2022
Net deferred tax liabilities, beginning of year | $ | (84.4) |  | $ | (128.8) |
Recognized in net earnings in the year | 86.8 |  | 43.9 |
Initial deferred tax liability associated with the Yamana Acquisition (Note 8) | (881.2) |  | — |
Disposition of mining properties (Note 9) | 419.3 |  | — |
Recognized in other comprehensive income (loss) in year (1) | (0.5) |  | 0.5 |
Other | (1.2) |  | — |
Net deferred liabilities, end of year | (461.2) |  | (84.4) |
Deferred tax assets | 80.4 |  | 55.9 |
Deferred tax liabilities | (541.6) |  | (140.3) |
Net deferred tax liabilities | $ | (461.2) |  | $ | (84.4) |
(1)Deferred tax impact related to unrealized loss on long-term investment (see Note 16). Components of deferred tax assets and liabilities The deferred tax assets (liabilities) are comprised of the various temporary differences, as detailed below:
| 2023 | 2022
Deferred tax assets (liabilities) arising from: |  |
Closure and decommissioning costs | $ | 33.9 |  | $ | 23.5 |
Tax losses, resource pools and mining tax credits | 84.6 |  | 83.8 |
Mineral properties, plant, and equipment | (636.0) |  | (217.2) |
Other temporary differences and provisions | 56.3 |  | 25.5 |
Net deferred tax liabilities | $ | (461.2) |  | $ | (84.4) |
At December 31, 2023, the net deferred tax liability above included the deferred tax asset of $84.6 million, which includes the benefits from tax losses ($34.8 million) and resource pools ($49.8 million). An insignificant amount of the losses is set to expire in 2024 ($0.4 million), with the majority of the losses set to expire in 2027 and later years, if unused. 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). An insignificant amount of the losses is set to expire in 2024 ($0.4 million), with the majority of the losses set to expire in 2027 and later years, 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:
| 2023 | 2022
Operating tax loss | $ | 1,236.6 |  | $ | 383.2 |
Net capital tax loss | 36.5 |  | 36.8 |
Resource pools and other tax credits (1) | 174.7 |  | 87.0 |
Mineral properties, plant, and equipment | 314.2 |  | 207.2 |
Closure and decommissioning costs | 297.6 |  | 207.3 |
Other temporary differences | 211.1 |  | 119.6 |
| $ | 2,270.7 |  | $ | 1,041.1 |
(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, 2023 |  |  |  |  |  |  |  |  |
| Canada | US | Peru | Mexico | Barbados | Argentina | Chile | Brazil | Netherlands | Total
2024 | $ | — |  | $ | 15.5 |  | $ | 0.3 |  | $ | 0.3 |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | 16.1 |
2025 | — |  | 9.7 |  | — |  | 0.6 |  | 4.7 |  | 5.4 |  | — |  | — |  | — |  | 20.4 |
2026 – and after | 695.2 |  | 146.1 |  | 0.4 |  | 2.2 |  | 20.9 |  | 95.1 |  | 146.6 |  | 88.2 |  | 5.4 |  | 1,200.1 |
Total tax losses | $ | 695.2 |  | $ | 171.3 |  | $ | 0.7 |  | $ | 3.1 |  | $ | 25.6 |  | $ | 100.5 |  | $ | 146.6 |  | $ | 88.2 |  | $ | 5.4 |  | $ | 1,236.6 |
At December 31, 2022 |  |  |  |  |  |  |  |  |
| Canada | US | Peru | Mexico | Barbados | Argentina | Chile | Brazil | Netherlands | Total
2023 | $ | — |  | $ | 0.4 |  | $ | — |  | $ | 0.3 |  | $ | 0.1 |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | 0.8 |
2024 | — |  | 0.4 |  | 0.3 |  | 0.3 |  | — |  | — |  | — |  | — |  | — |  | 1.0 |
2025 – and after | 342.2 |  | 11.0 |  | 0.3 |  | 2.3 |  | 0.3 |  | 25.3 |  | — |  | — |  | — |  | 381.4 |
Total tax losses | $ | 342.2 |  | $ | 11.8 |  | $ | 0.6 |  | $ | 2.9 |  | $ | 0.4 |  | $ | 25.3 |  | $ | — |  | $ | — |  | $ | — |  | $ | 383.2 |

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