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Current and Deferred Taxes

12 Months Ended

Dec. 31, 2023

Current and Deferred Taxes [Abstract]

NOTE 13 - CURRENT AND DEFERRED TAXES

a.	Current taxes

As of December 31, 2023 and 2022, the Bank recognises taxes payable (recoverable), which is determined based on the currently applicable tax legislation. This amount is recorded net of recoverable taxes, and is shown as follows:

	As of December 31,
	2023			2022
	MCh$			MCh$

Summary of current tax liabilities (assets)
Current tax (assets)		(93,604	)		(36,514	)
Current tax liabilities		257,336			148,680

Total tax payable (recoverable)		163,732			112,166

(Assets) liabilities current taxes detail (net)
Income tax, tax rate		256,257			147,668
Minus:
Provisional monthly payments		(89,631	)		(33,021	)
Credit for training expenses		(2,242	)		(2,039	)
Grant credits		(1,371	)		(1,160	)
Other		719			718
Total tax payable (recoverable)		163,732			112,166

b.	Effect on income

The effect of income tax expense on income for the years ended December 31, 2023, 2022 and 2021 is comprised of the following items:

	As of December 31,
	2023			2022			2021
	MCh$			MCh$			MCh$
Income tax expense
Current tax		238,875			139,961			4,434

Credits (debits) for deferred taxes
Origination and reversal of temporary differences		(131,195	)		(52,181	)		226,810
Valuation provision		-			-			-
Subtotals		107,680			87,780			231,244
Tax for rejected expenses (Article No21)		379			236			210
Other		(10,511	)		5,608			(9,790	)
Net charges for income tax expense		97,548			93,624			221,664

c.	Effective tax rate reconciliation

The reconciliation between the income tax rate and the effective rate applied in determining tax expenses as of December 31, 2023, 2023 and 2022, is as follows:

	For the year ended,
	2023						2022						2021
	Tax rate			Amount			Tax rate			Amount			Tax rate			Amount
	%			MCh$			%			MCh$			%			MCh$

Tax calculated over profit before tax		27.00			186,674			27.00			238,415			27.00			290,005
Price level restatement for tax purposes ⁽¹⁾		(12.19	)		(84,289	)		(18.70	)		(165,164	)		(7.56	)		(81,235	)
Single penalty tax (rejected expenses)		0.05			379			0.03			236			(0.01	)		210
Other		(0.75	)		(5,216	)		2.28			20,137			0.00			12,684
Effective tax rates and expenses for income tax		14.14			97,548			10.61			93,624			19.43			221,664

(1)	Mainly corresponds to the permanent differences originated from the Tax Capital Monetary Correction and the effect of the bonds received under article 104 of the Tax Law.

d.	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, 2023 and 2022:

	As of December 31,
	2023			2022
	MCh$			MCh$
Deferred tax assets
Debt instruments at FVOCI		30,150			76,512
Cash flow hedges		24,599			35,689
Total deferred tax assets recognised through other comprehensive income		54,749			112,201

Deferred tax liabilities
Debt instruments at FVOCI		5,919			(46,976	)
Cash flow hedges		47,391			(3,603	)
Total deferred tax liabilities recognised through other comprehensive income		53,310			(50,579	)

Net deferred tax balances in equity		1,439			61,622

Deferred taxes in equity attributable to shareholders of the Bank		1,938			61,821
Deferred tax in equity attributable to non-controlling interests		(499	)		(199	)

e.	Effect of deferred taxes on income

As of December 31, 2023 and 2022, the Bank has recorded effects for deferred taxes in the financial statements:

	As of December 31,
	2023		2022
	MCh$		MCh$
Deferred tax assets
Interests and adjustments		19,679		17,670
Extraordinary charge-offs		38,421		29,613
Assets received in lieu of payment		53		1,223
Property, plant and equipment valuation		6,426		4,708
Allowance for loan losses		219,226		276,364
Provision for expenses		77,149		88,372
Derivatives		275		50
Leased assets		106,230		95,152
Subsidiaries tax losses		1,108		5,570
Right of use assets		27,761		37,070
Others		2,398		9,444
Total deferred tax assets		498,726		565,236

Deferred tax liabilities
Valuation of investments		473		423
Prepaid expenses		3,829		7,285
Valuation provision		-		3,147
Derivatives		127,080		289,352
Lease obligations		27,433		36,183
Exchange rate adjustments		5,384		8,779
Other		427		17,162
Total deferred tax liabilities		164,626		362,331

f.	Summary of deferred tax assets and liabilities

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

	As of December 31,
	2023		2022
	MCh$		MCh$
Deferred tax assets
Recognised through other comprehensive income		54,749		112,201
Recognised through profit or loss		498,726		565,236
Total deferred tax assets		553,475		677,437

Deferred tax liabilities
Recognised through other comprehensive income		53,310		50,579
Recognised through profit or loss		164,626		326,331
Total deferred tax liabilities		217,936		412,910