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CURRENT AND DEFERRED TAXES

12 Months Ended

Dec. 31, 2020

Disclosure of income tax [text block] [Abstract]

NOTE 18 - CURRENT AND DEFERRED TAXES

In the year ended December 31, 2020, the income tax provision was calculated for such period, applying the partially semi-integrated taxation system and a rate of 27%, in accordance with the Law No. 21,210, which modernizes the Tax Legislation, published in the Journal of the Republic of Chile, dated February 24, 2020.

The net result for deferred tax corresponds to the variation of the year, of the assets and liabilities for deferred taxes generated by temporary differences and tax losses.

For the permanent differences that give rise to a book value of assets and liabilities other than their tax value, no deferred tax has been recorded since they are caused by transactions that are recorded in the financial statements and that will have no effect on spending tax for income tax.

(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,
	2020		2019		2020		2019		2020		2019
	ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$
Provisional monthly payments (advances)		36,788		10,968		-		-		36,788		10,968
Other recoverable credits		5,532		18,353		-		-		5,532		18,353
Total assets by current tax		42,320		29,321		-		-		42,320		29,321

(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,
	2020		2019		2020		2019		2020		2019
	ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$
Income tax provision		656		11,925		-		-		656		11,925
Total liabilities by current tax		656		11,925		-		-		656		11,925

(b) Deferred taxes

The balances of deferred tax are the following:

	Assets						Liabilities
Concept	As of December 31, 2020			As of December 31, 2019			As of December 31, 2020			As of December 31, 2019
	ThUS$			ThUS$			ThUS$			ThUS$

Properties, Plants and equipment		(1,314,456	)		186,311			81,881			1,700,215
Assets by right of use		229,119			42,011			(136	)		(91,470	)
Amortization		(65,139	)		(903	)		9			52,233
Provisions		212,492			(139,346	)		68,462			(182,913	)
Revaluation of financial instruments		(18,133	)		422			-			(9,857	)
Tax losses		1,496,952			155,539			(60,785	)		(1,200,729	)
Intangibles		-			-			270,681			349,082
Other		23,981			(8,451	)		24,168			242
Total		564,816			235,583			384,280			616,803

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, 2018

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

(b) From January 1 to December 31, 2019

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

(c)

From January 1 to December 31, 2020

	Opening balance Assets/ (liabilities)			Recognized in consolidated income			Recognized in comprehensive income		Exchange rate variation			Ending balance Asset (liability)
	ThUS$			ThUS$			ThUS$		ThUS$			ThUS$
Property, plant and equipment		(1,513,904	)		110,010			-		7,557			(1,396,337	)
Assets for right of use		133,481			95,774			-		-			229,255
Amortization		(53,136	)		(14,142	)		-		2,130			(65,148	)
Provisions		43,567			158,178			924		(58,639	)		144,030
Revaluation of financial instruments		10,279			(27,901	)		959		(1,470	)		(18,133	)
Tax losses		1,356,268			216,897			-		(15,428	)		1,557,737
Intangibles		(349,082	)		1,030			-		77,371			(270,681	)
Others		(8,693	)		6,541			-		1,965			(187	)
Total		(381,220	)		546,387			1,883		13,486			180,536

Unrecognized deferred tax assets:

Deferred tax assets are recognized to the extent that it is probable that the corresponding tax benefit will be realized in the future. Therefore, as of December 31, 2020, the Company has recognized provision with an impact on income, for the deferred tax assets that it estimates will not be recoverable in the foreseeable future for ThUS$ 237,637, in total the company has not recognized deferred tax assets for ThUS$ 749,100 (ThUS$ 110,933 as of December 31, 2019) which include deferred tax assets related to negative tax results of ThUS$ 1,433,474 (ThUS$ 338,679 at December 31, 2019).

Deferred tax expense and current income taxes:

	For the year ended
	December 31,
	2020			2019			2018
	ThUS$			ThUS$			ThUS$

Current tax expense
Current tax expense		(3,602	)		72,999			77,713
Adjustment to previous period’s current tax		(199	)		(352	)		362
Total current tax expense, net		(3,801	)		72,647			78,075
Deferred tax expense
Deferred expense for taxes related to the creation and reversal of temporary differences		(546,387	)		(126,344	)		(126,344	)
Total deferred tax expense, net		(546,387	)		(126,344	)		(126,344	)
Income/(loss) tax expense		(550,188	)		(53,697	)		(48,269	)

Composition of income/(loss) tax expense:

	For the year ended
	December 31,
	2020			2019			2018
	ThUS$			ThUS$			ThUS$
Current tax expense, net, foreign		4,232			76,806			65,850
Current tax expense, net, Chile		(8,033	)		(4,159	)		12,225
Total current tax expense, net		(3,801	)		72,647			78,075
Deferred tax expense, net, foreign		235,963			37,294			58,271
Deferred tax expense, net, Chile		(782,350	)		(163,638	)		(62,467	)
Deferred tax expense, net, total		(546,387	)		(126,344	)		(4,196	)
Income/(loss) tax expense		(550,188	)		(53,697	)		73,879

Income before tax from the Chilean legal tax rate (27% as of December 31, 2020 and 2019)

	For the year ended									For the year ended
	December 31,									December 31,
	2020			2019			2018			2020			2019			2018
	ThUS$			ThUS$			ThUS$			%			%			%
Tax expense using the legal rate		(1,378,547	)		38,318			11,230			27.00			27.00			27.00
Tax effect by change in tax rate		-			-			5,587			-			-			1.34
Tax effect of rates in other jurisdictions		(58,268	)		20,082			15,905			1.14			14.15			3.83
Tax effect of non-taxable operating revenues		(19,529	)		(13,125	)		(3,076	)		0.38			(9.25	)		(0.74	)
Tax effect of disallowable expenses		40,528			66,257			61,295			(0.79	)		46.69			14.75
Other increases (decreases):
Derecognition of deferred tax liabilities for early termination of aircraft financing		(294,969	)		(145,930	)		-			5.78			(102.83	)		-
Tax effect for goodwill impairment losses		453,681			-			-			(8.89	)		-			-
Derecognition of deferred tax assets not recoverable		237,637			-			-			(4.65	)		-			-
Deferred tax asset not recognized		414,741			-			-			(8.12	)		-			-
Other increases (decreases):		54,538			(19,299	)		-			(1.07	)		(13.60	)		-
Total adjustments to tax expense using the legal rate		828,359			(92,015	)		79,711			(16.22	)		(64.84	)		19.18
Tax expense using the effective rate		(550,188	)		(53,697	)		90,941			10.78			(37.84	)		46.18

Deferred taxes related to items charged to equity:

	For the year ended
	December 31,
	2020		2019
	ThUS$		ThUS$
Aggregate deferred taxation of components of other comprehensive income		1,883		3,287