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CURRENT AND DEFERRED TAXES

12 Months Ended

Dec. 31, 2021

Disclosure of income tax [text block] [Abstract]

NOTE 18 - CURRENT AND DEFERRED TAXES

In the year ended December 31, 2021, 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,
	2021		2020		2021		2020		2021		2020
		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$
Provisional monthly payments (advances)		32,086		36,788		-		-		32,086		36,788
Other recoverable credits		9,171		5,532		-		-		9,171		5,532
Total current tax assets		41,257		42,320		-		-		41,257		42,320

(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,
	2021		2020		2021		2020		2021		2020
	ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$
Income tax provision		675		656		-		-		675		656
Total current tax liabilities		675		656		-		-		675		656

(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,
	2021			2020			2021			2020
	ThUS$			ThUS$			ThUS$			ThUS$

Properties, Plants and equipment		(1,128,225	)		(1,314,456	)		80,468			81,881
Assets by right of use		715,440			229,119			(68	)		(136	)
Amortization		(44,605	)		(65,139	)		10			9
Provisions		111,468			212,492			74,047			68,462
Revaluation of financial instruments		(16,575	)		(18,133	)		-			-
Tax losses		358,284			1,496,952			(87,378	)		(60,785	)
Intangibles		-			-			254,155			270,681
Other		19,503			23,981			19,777			24,168

Total		15,290			564,816			341,011			384,280

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, 2019

	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	)

(b) 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

	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		(1,396,337	)		187,644			-			-		(1,208,693	)
Assets for right of use		229,255			486,253			-			-		715,508
Amortization		(65,148	)		20,533			-			-		(44,615	)
Provisions		144,030			(103,826	)		(2,783	)		-		37,421
Revaluation of financial instruments		(18,133	)		1,616			(58	)		-		(16,575	)
Tax losses (*)		1,557,737			(1,112,075	)		-			-		445,662
Intangibles		(270,681	)		(1,394	)		-			17,920		(254,155	)
Others		(187	)		(87	)		-			-		(274	)
Total		180,536			(521,336	)		(2,841	)		17,920		(325,721	)

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. In total the company has not recognized deferred tax assets for ThUS$ 2,638,473 (ThUS$ 749,100 as of December 31, 2020) which include deferred tax assets related to negative tax results of ThUS$ 9,030,059 (ThUS$ 1,433,474 at December 31, 2020).

(*)

As stated in note 2c), on November 26th, 2021 the Company filed a Reorganization Plan and Disclosure Statement in which, among other items, financial forecasts are included together with the proposed issuance of new shares and convertible bonds. With the referred information, the Company management updated its analysis on the recoverability of deferred tax assets and determined that during the time covered by the financial forecast it will not be probable that part of such deferred tax assets may offset future taxable profits. Therefore, the Company during the fourth quarter of 2021 derecognized deferred tax assets not considered recoverable in the amount of THUS$1,251,912.

Deferred tax expense and current income/(loss) taxes:

	For the year ended
	December 31,
	2021			2020		2019
	ThUS$			ThUS$		ThUS$
Current tax expense
Current tax expense		(47,139	)		3,602		(72,999	)
Adjustment to previous period’s current tax		(460	)		199		352
Total current tax expense, net		(47,599	)		3,801		(72,647	)

Deferred tax expense
Deferred expense for taxes related to the creation and reversal of temporary differences		(521,336	)		546,387		126,344
Total deferred tax expense, net		(521,336	)		546,387		126,344
Income/(loss) tax expense		(568,935	)		550,188		53,697

Composition of income/(loss) tax expense:

	For the year ended
	December 31,
	2021			2020			2019
	ThUS$			ThUS$			ThUS$
Current tax expense, net, foreign		(9,943	)		(4,232	)		(76,806	)
Current tax expense, net, Chile		(37,656	)		8,033			4,159
Total current tax expense, net		(47,599	)		3,801			(72,647	)
Deferred tax expense, net, foreign		4,309			(235,963	)		(37,294	)
Deferred tax expense, net, Chile		(525,645	)		782,350			163,638
Deferred tax expense, net, total		(521,336	)		546,387			126,344
Income tax (expense)/benefit		(568,935	)		550,188			53,697

Income before tax from the Chilean legal tax rate (27% as of December 31, 2021 and 2020)

	For the year ended December 31,									For the year ended December 31,
	2021			2020			2019			2021			2020			2019
	ThUS$			ThUS$			ThUS$			%			%			%
Tax expense using the legal rate		1,102,736			1,378,547			(38,318	)		(27.00	)		(27.00	)		(27.00	)

Tax effect of rates in other jurisdictions		54,775			58,268			(20,082	)		(1.34	)		(1.14	)		(14.15	)
Tax effect of non-taxable operating revenues		9,444			19,529			13,125			(0.23	)		(0.38	)		9.25
Tax effect of disallowable expenses		(30,928	)		(40,528	)		(66,257	)		0.76			0.79			(46.69	)
Other increases (decreases):
Derecognition of deferred tax liabilities for early termination of aircraft financing		205,458			294,969			145,930			(5.03	)		(5.78	)		102.83
Tax effect for goodwill impairment losses		-			(453,681	)		-			-			8.89			-
Derecognition of deferred tax assets not recoverable		(1,251,912	)		(237,637	)		-			30.65			4.65			-
Deferred tax asset not recognized		(667,702	)		(414,741	)		-			16.35			8.12			-
Other increases (decreases):		9,194			(54,538	)		19,299			(0.23	)		1.07			13.60
Total adjustments to tax expense using the legal rate		(1,671,671	)		(828,359	)		92,015			40.93			16.22			64.84
Tax expense using the effective rate		(568,935	)		550,188			53,697			13.93			(10.78	)		37.84

Deferred taxes related to items charged to equity:

	For the year ended
	December 31,
	2021			2020
	ThUS$			ThUS$
Aggregate deferred taxation of components of other comprehensive income		(2,841	)		1,883