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CURRENT AND DEFERRED TAXES

12 Months Ended

Dec. 31, 2019

Disclosure of income tax [text block] [Abstract]

NOTE 18 - CURRENT AND DEFERRED TAXES

In the period ended December 31, 2019, the income tax provision was calculated for such period, applying the partially integrated taxation system and a rate of 27%, in accordance with the Law No. 20,780 published in the Official Journal of the Republic of Chile on September 29, 2014.

Deferred taxes are recognized, on the temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements.

No deferred tax has been recorded for permanent difference, since they are caused by transactions that are recorded in the financial statements and that will not have impact on income taxes.

(a)

Current taxes

(a.1)

The composition of the current tax assets is the following:

	Current assets				Non-current assets				Total assets
	As of		As of		As of		As of		As of		As of
	December 31,		December 31,		December 31,		December 31,		December 31,		December 31,
	2019		2018		2019		2018		2019		2018
	ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$
Provisional monthly payments (advances)		10,968		48,480		-		-		10,968		48,480
Other recoverable credits		18,353		20,654		-		757		18,353		21,411
Total assets by current tax		29,321		69,134		-		757		29,321		69,891

(a.2)

The composition of the current tax liabilities are as follows:

	Current liabilities				Non-current liabilities				Total liabilities
	As of		As of		As of		As of		As of		As of
	December 31,		December 31,		December 31,		December 31,		December 31,		December 31,
	2019		2018		2019		2018		2019		2018
	ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$
Income tax provision		11,925		3,738		-		-		11,925		3,738
Total liabilities by current tax		11,925		3,738		-		-		11,925		3,738

(b)

Deferred taxes

The balances of deferred tax are the following:

	Assets						Liabilities
	As of			As of			As of			As of
Concept	December 31,			December 31,			December 31,			December 31,
	2019			2018			2019			2018
	ThUS$			ThUS$			ThUS$			ThUS$
				Restated						Restated
Properties, Plants and equipment		186,311			150,831			1,700,215			1,733,327
Assets by right of use		42,011			202			(91,470	)		(85,550	)
Amortization		(903	)		(983	)		52,233			55,880
Provisions		(139,346	)		(38,303	)		(182,913	)		(75,631	)
Revaluation of financial instruments		422			445			(9,857	)		458
Tax losses		155,539			170,980			(1,200,729	)		(1,198,170	)
Intangibles		-			-			349,082			351,238
Others		(8,451	)		(9,643	)		242			5,019
Total		235,583			273,529			616,803			786,571

The balance of deferred tax assets and liabilities are composed primarily of temporary differences to be reversed in the long term.

Movements of Deferred tax assets and liabilities

(a) From January 1 to December 31, 2017

	Opening			Recognized in			Recognized in			Exchange			Ending
	balance			consolidated			comprehensive			rate			balance
	Assets/(liabilities)			income			income			variation			Asset (liability)
	ThUS$			ThUS$			ThUS$			ThUS$			ThUS$

Properties, Plants and equipment		(1,615,783	)		46,403			-			616			(1,568,764	)
Assets by right of use		61,343			14,506			-			-			75,849
Amortization		(77,480	)		22,486			-			174			(54,820	)
Provisions		281,369			(286,267	)		(785	)		(4,778	)		(10,461	)
Revaluation of financial instruments		3,223			2,417			(1,770	)		(120	)		3,750
Tax losses		1,328,736			152,081			-			(1,257	)		1,479,560
Intangibles		(430,705	)		24,436			-			(267	)		(406,536	)
Others		(20,539	)		(7,547	)		-			(319	)		(28,405	)
Total		(469,836	)		(31,485	)		(2,555	)		(5,951	)		(509,827	)

(b) From January 1 to December 31, 2018 Restated (Unaudited)

	Opening			Recognized in			Recognized in			Exchange			Ending
	balance			consolidated			comprehensive			rate			balance
	Assets/(liabilities)			income			income			variation			Asset (liability)
	ThUS$			ThUS$			ThUS$			ThUS$			ThUS$

Property, plant and equipment		(1,568,764	)		(19,735	)		-			6,003			(1,582,496	)
Assets for right of use		75,849			9,903			-			-			85,752
Amortization		(54,820	)		(3,735	)		-			1,692			(56,863	)
Provisions		(10,461	)		92,804			1,566			(46,581	)		37,328
Revaluation of financial instruments		3,750			(2,326	)		(269	)		(1,168	)		(13	)
Tax losses		1,479,560			(98,154	)		-			(12,256	)		1,369,150
Intangibles		(406,536	)		20,000			-			35,298			(351,238	)
Others		(28,405	)		5,439			-			8,304			(14,662	)
Total		(509,827	)		4,196			1,297			(8,708	)		(513,042	)

	Opening			Recognized in			Recognized in		Exchange			Ending
	balance			consolidated			comprehensive		rate			balance
	Assets/(liabilities)			income			income		variation			Asset (liability)
	ThUS$			ThUS$			ThUS$		ThUS$			ThUS$

Property, plant and equipment		(1,582,496	)		67,237			-		1,355			(1,513,904	)
Assets for right of use		85,752			47,729			-		-			133,481
Amortization		(56,863	)		3,345			-		382			(53,136	)
Provisions		37,328			13,881			2,873		(10,515	)		43,567
Revaluation of financial instruments		(13	)		10,142			414		(264	)		10,279
Tax losses		1,369,150			(10,116	)		-		(2,766	)		1,356,268
Intangibles		(351,238	)		(11,718	)		-		13,874			(349,082	)
Others		(14,662	)		5,844			-		125			(8,693	)
Total		(513,042	)		126,344			3,287		2,191			(381,220	)

Deferred tax assets not recognized:

	As of		As of
	December 31,		December 31,
	2019		2018
	ThUS$		ThUS$

Tax losses		110,933		137,761
Total Deferred tax assets not recognized		110,933		137,761

Deferred tax assets on tax losses are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. As a result, as of December 31, 2019, the Company no longer recognizes deferred tax assets for ThUS $ 110.933 (ThUS $ 137,761 as of December 31, 2018) with respect to losses of ThUS $ 338,679 (ThUS $ 447,150 at December 31, 2018).

Deferred tax expense and current income taxes:

	For the year ended
	December 31,
	2019			2018			2017
	ThUS$			ThUS$			ThUS$
				Restated			Restated

Current tax expense
Current tax expense		72,999			77,713			127,024
Adjustment to previous period’s current tax		(352	)		362			489
Total current tax expense, net		72,647			78,075			127,513

Deferred tax expense

Deferred expense for taxes related to the creation and reversal of temporary differences		(126,344	)		(4,196	)		31,485
Total deferred tax expense, net		(126,344	)		(4,196	)		31,485
Income tax expense		(53,697	)		73,879			158,998

Composition of income tax expense (income):

	For the year ended
	December 31,
	2019			2018			2017
	ThUS$			ThUS$			ThUS$
				Restated			Restated

Current tax expense, net, foreign		76,806			65,850			100,657
Current tax expense, net, Chile		(4,159	)		12,225			26,856
Total current tax expense, net		72,647			78,075			127,513

Deferred tax expense, net, foreign		37,294			58,271			21,846
Deferred tax expense, net, Chile		(163,638	)		(62,467	)		9,639
Deferred tax expense, net, total		(126,344	)		(4,196	)		31,485
Income tax expense		(53,697	)		73,879			158,998

Profit before tax by the legal tax rate in Chile (27% at December 31, 2019 and 2018)

	For the year ended									For the year ended
	December 31,									December 31,
	2019			2018			2017			2019			2018			2017
	ThUS$			ThUS$			ThUS$			%			%			%

Tax expense using the legal rate		38,318			112,230			95,425			27.00			27.00			25.50

Tax effect by change in tax rate		-			5,587			897			-			1.34			0.24
Tax effect of rates in other jurisdictions		20,082			15,905			42,326			14.15			3.83			11.31
Tax effect of non-taxable operating revenues		(13,125	)		(3,076	)		(44,593	)		(9.25	)		(0.74	)		(11.92	)
Tax effect of disallowable expenses		66,257			61,295			35,481			46.69			14.75			9.48
Tax effect of due to the non-use of tax losses		-			46,492			211			-			11.18			0.06
Other increases (decreases) in legal tax charge		(165,229	)		(164,554	)		43,757			(116.43	)		(39.59	)		11.69
Total adjustments to tax expense using the legal rate		(92,015	)		(38,351	)		78,079			(64.84	)		(9.23	)		20.86
Tax expense using the effective rate		(53,697	)		73,879			173,504			(37.84	)		17.77			46.36

Other increases (decreases) in legal tax charges for US $ 165.2 million (US $ 164.6 million as of December 31, 2018) mainly include the effect of the reduction of the deferred tax liability of US $ 145.9 million (US $ 172.9 to 31 December 2018) that occurs at the early termination of the aircraft financing that were on leasing with special purpose vehicle outside Chile; and other adjustments for permanent differences in other group companies for US $ 19.3 million (US $ 8.3 as of December 31, 2018).

Deferred taxes related to items charged to net equity:

	For the period ended
	December 31,
	2019		2018
	ThUS$		ThUS$

Aggregate deferred taxation of components of other comprehensive income		3,287		1,297