Income Tax

12 Months Ended

Dec. 31, 2022

17.	INCOME TAX

The calculation of the income tax expense accrued for the years ended December 31, 2022, 2021 and 2020:


	2022			2021		2020
Current income tax		(31)			(18)		(15)
Deferred income tax		(810)			(681)		(247)

		(841)			(699)		(262)

Income tax - Well abandonment		19	(1)		-		78	(1)

		(822)			(699)		(184)

(1)	Corresponding to the effect of the regularization regime for the dispute associated to cost deduction for hydrocarbon wells abandonment. See Note 16.a.5).

The reconciliation between the charge to net income for income tax for the years ended December 31, 2022, 2021 and 2020 and the one that would result from applying the prevailing tax rate on net income before income tax arising from the consolidated statements of comprehensive income for each fiscal year is as follows:


	2022				2021				2020
Net profit / (loss) before income tax		3,056				715				(837	)
Average tax rate		25.33%		(4)		34.55%		(4)		29.36%

Average tax rate applied to net profit / (loss) before income tax		(774	)			(247	)			246
Effect of the valuation of property, plant and equipment and intangible assets, net		154				501				(820	)
Effect of exchange differences and other results associated to the valuation of the currency, net (1)		(112	)			(500	)			338
Effect of the valuation of inventories		(268	)			(108	)			(153	)
Income on investments in associates and joint ventures		112				99				56
Effect of tax rate change		(25	)	(2) (3)		(439	)	(3)		41		(2)
Effect of the regularization regime for the dispute associated to cost deduction for hydrocarbon wells abandonment		18				-				78
Interest related to the payment facility plan for the dispute associated to cost deduction for hydrocarbon wells abandonment.		-				-				(8	)
Miscellaneous		73				(5	)			38

Income tax		(822	)			(699	)			(184	)

(1)	Includes the effect of tax inflation.

(2)	Corresponds to the remedation of deferred income tax at the current rate. See Notes 2.b.15) and 35.e.1).

(3)	Corresponds to the effect of tax rate change on opening deferred tax balances at the rate prevailing at the time of reversal pursuant to amendment introduced by Law No. 27,630. See Note 35.e.1).

(4)	Corresponds to the projected average tax rate of YPF and its subsidiaries pursuant to amendment introduced by Law No. 27,630. See Note 35.e.1).

Furthermore, breakdown of Income tax liability, Deferred income tax assets, net and Deferred income tax liabilities, net deferred as of December 31, 2022, 2021 and 2020 is as follows:


	2022						2021						2020
	Non-current			Current			Non-current			Current			Non-current			Current
Income tax liability		26	(2)		27	(1)		29	(2)		13	(1)		42	(2)		9	(1)

(1)

Includes 6, 5 and 6 corresponding to the 12 installments of the regularization regimes associated with the dispute over the cost deduction for hydrocarbon well abandonment as of December 31, 2022, 2021 and 2020, respectively (see Note 16.a.5)). Additionally, it includes the provision associated with the charge of current income tax net of unused tax credits and existing tax loss carryforwards.

(2)	Includes 26, 29 and 42 corresponding to the remaining installments of the aforementioned regimes as of December 31, 2022, 2021 and 2020, respectively. See Note 16.a.5).


	2022		2021		2020
Deferred tax assets
Provisions and other non-deductible liabilities		154		380		175
Tax losses carryforward		167		27		983
Miscellaneous		1		16		20

		322		423		1,178

Deferred tax liabilities
Property, plant and equipment and others (1)		(1,020)		(1,526)		(1,724)
Adjustment for tax inflation (2)		(965)		(644)		(798)
Miscellaneous		(53)		(39)		(46)

Total deferred tax liabilities		(2,038)		(2,209)		(2,568)

Total Net deferred tax (3)		(1,716)		(1,786)		(1,390)

(1)	Includes the deferred tax corresponding to Property, Plant and Equipment, Intangible assets, Inventories, Right-of-use assets and Lease liabilities, net.

(2)	Includes the effect of the deferral of the tax inflation adjustment. See “Budget Law 2023 - Deferral of tax adjustment for inflation” section Note 35.e.1).

(3)

Includes (86), (37) and (23) corresponding to adjustment for inflation of the opening deferred liability of subsidiaries with the Peso as functional currency which was charged to other comprehensive income and includes 965, 322 and 480 corresponding to the effect of the translation, as of December 31, 2022, 2021 and 2020, respectively.

Deferred income tax assets are recognized for tax loss carryforwards to the extent their setoff through future taxable profits is probable. As of December 31, 2022, the Group has recognized tax loss carryforwards for 46 and 121 that can be offset with taxable profits until the years 2025 and 2027, respectively, in accordance with current tax laws.

In order to fully realize the deferred income tax asset, the Group will need to generate taxable income. Based upon the level of historical taxable income and future projections for the years in which the deferred income tax assets are deductible, the Company believes that as of December 31, 2022 it is probable that the Group will realize all of the deferred income tax assets.

As of December 31, 2022, there are no deferred tax assets which are not recognized. As of December 31, 2021 and 2020, the credit for tax loss carryforwards not recognized by the Group amounted to 37 with expiration between 2022 and 2025, and to 11 with expiration between 2021 and 2025, respectively.

As of December 31, 2022, 2021 and 2020, the Group has classified as deferred tax assets 17, 19 and 33, respectively, and as deferred tax liability 1,733, 1,805 and 1,423, respectively, all of which arise from the net deferred tax balances of each of the separate companies included in these consolidated financial statements.

On March 28, 2019, the Company agreed to adhere to the tax revaluation regime established under Law No. 27,430 for the “Mines, Quarries, Forests and Similar Assets” category. This allow a higher deduction of the depreciation of income tax revalued assets, and therefore will affect the recording of the deferred income tax.