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CURRENT AND DEFERRED TAXES (Tables)
 12 Months Ended
Dec. 31, 2018
Current And Deferred Taxes  
Schedule of taxes payable (recoverable)

This amount is recorded net of recoverable taxes, and is shown as follows:

 

  As of December 31,  
           2018   2017
          MCh$   MCh$
       
Summary of current tax liabilities (assets)      
Current tax (assets) -   -
Current tax liabilities 8,093   6,435
       
Total tax payable (recoverable) 8,093   6,435
       
(Assets) liabilities current taxes detail (net)      
Income tax, tax rate(*) 196,527   145,112
Minus:      
Provisional monthly payments (186,060)   (136,562)
Credit for training expenses   (1,937)   (1,768)
Land taxes leasing -   -
Grant credits (1,320)   (968)
Other 883   621
       
Total tax payable 8,093   6,435
         

(*)The tax rate is 27,0% for 2018 and 25,5% for 2017,
Schedule of effect on income

The effect of tax expense on income for the years ended December 31, 2018, 2017 and 2016 is comprised of the following items:

 

    As of December 31,
                2018             2017               2016
               MCh$            MCh$              MCh$
           
Income tax expense          
Current tax   196,527   145,112 145,963
           
Credits (debits) for deferred taxes          
Origination and reversal of temporary differences   (25,517)   (6,751) (37,269)
Valuation provision   (56)   5,955 -
Subtotals   170,954   144,316 108,694
Tax for rejected expenses (Article No,21)   1,110   610 336
Other   (4,920)   105 1
Net charges for income tax expense   167,144   145,031 109,031
Schedule of effective tax rate reconciliation

The reconciliation between the income tax rate and the effective rate applied in determining tax expenses as of December 31, 2018, 2017 and 2016, is as follows:

 

    For the year ended December 31,
  2018   2017   2016
 

Tax

rate

   Amount

Tax

rate 

   Amount   Tax      
    rate   Amount  
  %   MCh$   %   MCh$   %   MCh$  
                         
Tax calculated over profit before tax 27.00   207,046   25.50   183,671   24.00   140,991  
Price level restatement for tax purposes(1) (5.15)   (39,494)   (3.03)   (21,829)   (5.49)   (32,256)  
Single penalty tax (rejected expenses) 0.14   1,110   0.08   610   0.06   336  
Effect of tax reform changes on deferred tax(2) 0.00   -   (2.86)   (20,600)   0.01   86  
Real estate taxes 0.00   -   0.00   -   0.00   -  
Other (0.20)   (1,518)   0.44   3,179   (0.02)   (126)  
Effective rates and expenses for income tax 21.80   167,144   20.13   145,031   18.56   109,031  

(1) Price level restatement on tax purpose capital.

(2) In accordance with Chilean Law N°20,780 published in September 29, 2014 the income tax rate are 25.5% and 27% for 2017 and 2018 respectively.
Schedule of effect of deferred taxes on comprehensive income

Below is a summary of the separate effect of deferred tax on other comprehensive income, showing the asset and liability balances, for the years ended December 31, 2018 and 2017:

 

  As of December 31,
                2018   2017
               MCh$   MCh$
       
Deferred tax assets      
  Available for sale investments -   368
  Debt instruments at FVOCI 1,166   -
  Cash flow hedges 65   908
Total deferred tax assets recognised through other comprehensive income 1,231   1,276
       
Deferred tax liabilities      
  Available for sale investments -   (841)
  Debt instruments at FVOCI (2,976)   -
  Cash flow hedges (2,711)   -
Total deferred tax liabilities recognised through other comprehensive income (5,687)   (841)
       
Net deferred tax balances in equity (4,456)   (435)
       
Deferred taxes in equity attributable to shareholders of the Bank (4,102)   791
Deferred tax in equity attributable to non-controlling interests (354)   (356)
Schedule of effect of deferred taxes on income

As of December 31, 2018 and 2017, the Bank has recorded effects for deferred taxes in the financial statements:

 

  As of December 31,
              2018           2017
             MCh$          MCh$
Deferred tax assets      
Interests and adjustments 9,384   8,645
Non-recurring charge-offs 13,389   11,651
Assets received in lieu of payment 785   1,582
Exchange rate adjustments 1,675   882
Property, plant and equipment valuation 6,138   4,410
Allowance for loan losses 184,488   160,359
Provision for expenses 63,134   73,518
Derivatives 3,924   5,249
Leased assets 107,897   98,090
Subsidiaries tax losses 5,314   5,277
Prepaid expenses 156   151
Total deferred tax assets 396,284   369,814
       
Deferred tax liabilities      
Valuation of investments (42)   (1,911)
Prepaid expenses (349)   -
Depreciation -   (532)
Valuation provision (5,989)   (5,955)
Exchange rate adjustments (3,383)   -
Other (20)    (432)
Total deferred tax liabilities (9,783)   (8,830)
Schedule of deferred tax assets and liabilities

Below is a summary of the deferred taxes impact on equity and income,

 

  As of December 31,
         2018        2017
         MCh$        MCh$
       
Deferred tax assets      
Recognised through other comprehensive income 1,231   1,276
Recognised through profit or loss 396,284   369,815
Total deferred tax assets 397,515   371,091
       
Deferred tax liabilities      
Recognised through other comprehensive income (5,687)   (841)
Recognised through profit or loss (9,783)   (8,822)
Total deferred tax liabilities (15,470)   (9,663)