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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

The amounts of income tax expense in the statements of operations for 2022, 2021 and 2020 are summarized as follows:


	2022		2021			2020
Current income tax expense	$	170		172			158
Deferred income tax expense (income)		39		(35	)		(122	)

	$	209		137			36

Summary of Temporary Differences in Deferred Income Tax Assets and Liabilities

As of December 31, 2022 and 2021, the main temporary differences that generated the consolidated deferred income tax assets and liabilities are presented below:


	2022			2021
Deferred tax assets:
Tax loss carryforwards and other tax credits	$	561			662
Accounts payable and accrued expenses		754			808
Intangible assets, net		140			138

Total deferred tax assets, gross		1,455			1,608
Presentation of net position by same legal entity		(1,044	)		(1,046	)

		411			562


Deferred tax liabilities:
Property, machinery and equipment and right-of-use asset, net		(1,406	)		(1,502	)
Investments and other assets		(32	)		(29	)

Total deferred tax liabilities, gross		(1,438	)		(1,531	)
Presentation of net position by same legal entity		1,044			1,046

Total deferred tax liabilities, net in the statement of financial position		(394	)		(485	)

Net deferred tax assets (liabilities)	$	17			77

Out of which:
Net deferred tax liabilities in Mexican entities 1	$	(17	)		(81	)
Net deferred tax assets in foreign entities 2		34			158

Net deferred tax assets	$	17			77

Net deferred tax liabilities in Mexico at the reporting date mainly refer to a temporary difference resulting when comparing the carrying amount of property, machinery and equipment, against their corresponding tax values (remaining

tax-deductible

amount), partially offset by certain deferred tax assets from tax loss carryforwards that are expected to be recovered in the future against taxable income. When the book value is greater than the related tax value results in a deferred tax liability. In 2011, upon transition to IFRS, CEMEX elected to measure its fixed assets at fair value, which resulted in a significant increase in book value, mainly associated with the revaluation of mineral reserves. Such restated amounts are depleted to the income statement in a period close to 35 years, generating accounting expense that is not

tax-deductible;

hence the temporary difference will gradually reverse over time but does not represent a payment obligation to the tax authority at the reporting date.

2	Net deferred tax assets in foreign entities in 2022 and 2021 are mainly related to tax loss carryforwards recognized in prior years, mainly in the United States, that are expected to be recovered in the future against taxable income.

Summary of the Balances of the Deferred tax Assets and Liabilities in Statement of Financial Position

As of December 31, 2022 and 2021, balances of the deferred tax assets and liabilities included in the statement of financial position are located in the following entities:


	2022								2021
	Assets		Liabilities			Net			Assets		Liabilities			Net
Mexican entities	$	168		(185	)		(17	)	$	191		(272	)		(81	)
Foreign entities		243		(209	)		34			371		(213	)		158

	$	411		(394	)		17		$	562		(485	)		77

Summary of Breakdown of Changes in Consolidated Deferred Income Taxes

The breakdown of changes in consolidated deferred income taxes during 2022, 2021 and 2020 was as follows:


	2022		2021			2020
Deferred income tax expense (income) in the income statement	$	39		(35	)		(122	)
Deferred income tax expense (income) in stockholders’ equity		14		(38	)		(41	)
Reclassifications 1		7		78			(12	)

Change in deferred income tax during the period	$	60		5			(175	)

1	In 2022, 2021 and 2020, refers to the effects of the reclassification of balances to assets held for sale and related liabilities (note 4.2).

Summary of Current and Deferred Income Tax Relative to Items of Other Comprehensive Income Loss

Current and/or deferred income tax relative to items of other comprehensive income during 2022, 2021 and 2020 were as follows:


	2022			2021			2020
Revenue related to foreign exchange fluctuations from intercompany balances (note 21.2)	$	—			(6	)		(19	)
Expense (revenue) associated to actuarial results (note 21.2)		32			26			(41	)
Revenue related to derivative financial instruments (note 17.4)		(30	)		(1	)		14
Expense (revenue) from foreign currency translation and other effects		12			(63	)		(14	)

	$	14			(44	)		(60	)

Schedule of Consolidated Tax Loss and Tax Credits Carry Forwards Expire

As of December 31, 2022, consolidated tax loss and tax credits carryforwards expire as follows:


	Amount of carryforwards		Amount of unrecognized carryforwards		Amount of recognized carryforwards
2023	$	185		156		29
2024		148		20		128
2025		209		192		17
2026		209		191		18
2027 and thereafter		7,739		5,707		2,032

	$	8,490		6,266		2,224

Schedule of Effective Tax Rate Table

For the years ended December 31, 2022, 2021 and 2020, the effective consolidated income tax rates were as follows:


	2022			2021			2020
Earnings (loss) before income tax	$	770			954			(1,310	)
Income tax expense		(209	)		(137	)		(36	)

Effective consolidated income tax expense rate 1		27.1	%		14.4	%		(2.7	)%

1	The average effective tax rate equals the net amount of income tax revenue or expense divided by income or loss before income taxes, as these line items are reported in the income statement.

Schedule of Reconciliation Between Actual Income Tax Expense and Amount Computed by Applying Statutory Tax Rate

Differences between the financial reporting and the corresponding tax basis of assets and liabilities and the different income tax rates and laws applicable to CEMEX, among other factors, give rise to permanent differences between the statutory tax rate applicable in Mexico, and the effective tax rate presented in the consolidated statements of operations, which in 2022, 2021 and 2020 were as follows:


	2022						2021						2020
	%			$			%			$			%			$
Mexican statutory tax rate		30.0			231			30.0			280			30.0			(391	)
Difference between accounting and tax expenses, net 1		35.8			276			4.8			45			(18.4	)		240
Non-taxable sale of equity securities and fixed assets		3.4			26			(3.8	)		(35	)		1.3			(17	)
Difference between book and tax inflation		28.2			217			23.9			223			(7.1	)		92
Differences in the income tax rates in the countries where CEMEX operates 2		(6.2	)		(48	)		4.7			44			(0.9	)		12
Changes in deferred tax assets 3		(59.7	)		(460	)		(48.7	)		(454	)		(9.6	)		125
Changes in provisions for uncertain tax positions		(5.1	)		(39	)		2.6			24			0.2			(3	)
Others		0.7			6			0.9			10			1.8			(22	)

Effective consolidated income tax expense rate		27.1			209			14.4			137			(2.7	)		36

1	In 2022 includes $365 and in 2020 includes $312, related to the effects of the impairment charges during the periods which are basically non-deductible (note 7).

2	Refers mainly to the effects of the differences between the statutory income tax rate in Mexico of 30% against the applicable income tax rates of each country where CEMEX operates. In 2021 includes the effect related to the change in statutory tax rate in Colombia from 30% to 35%.

3	Refers to the effects in the effective income tax rate associated with changes during the period in the amount of deferred income tax assets related to CEMEX’s tax loss carryforwards.

Schedule of Variations Between the Line Item Changes in Deferred Tax Assets Against the Changes in Deferred Tax Assets in the Balance Sheet

The following table compares the line item “Changes in deferred tax assets” as presented in the table above against the changes in deferred tax assets in the statement of financial position for the years ended December 31, 2022 and 2021:


	2022						2021
	Changes in the statement of financial position			Amounts in reconciliation			Changes in the statement of financial position			Amounts in reconciliation
Tax loss carryforwards generated and not recognized during the year	$	—			38			—			9
Derecognition related to tax loss carryforwards recognized in prior years		(103	)		—			(145	)		—
Recognition related to unrecognized tax loss carryforwards		16			(498	)		19			(460	)
Foreign currency translation and other effects		(14	)		—			11			(3	)

Changes in deferred tax assets	$	(101	)		(460	)		(115	)		(454	)

Schedule of Unrecognized Tax Benefits

A summary of the beginning and ending amount of unrecognized tax benefits for the years ended December 31, 2022, 2021 and 2020, excluding interest and penalties, is as follows:


	2022			2021			2020
Balance of tax positions at beginning of the period	$	48			27			28
Additions for tax positions of prior periods		5			4			—
Additions for tax positions of current period		5			27			3
Reductions for tax positions related to prior periods and other items		(11	)		(2	)		(1	)
Settlements and reclassifications		(4	)		(5	)		(3	)
Expiration of the statute of limitations		(2	)		(2	)		(2	)
Foreign currency translation effects		—			(1	)		2

Balance of tax positions at end of the period	$	41			48			27