Income and Social Contribution Taxes (Tables)

12 Months Ended

Dec. 31, 2017

Summary of Income and Social Contribution Taxes recoverable


	2017		2016
Current
Income tax		224		436
Social contribution tax		116		154

		340		590
Non-current
Income tax		7		98
Social contribution tax		14		14

		21		112

		361		702

Summary of Deferred Income and Social Contribution Taxes

The Company has tax credits for income tax and the Social Contribution tax, arising from balances of tax losses, negative base for the Social Contribution tax, and temporary differences, at the rates of 25% (for Income tax) and 9% (for the Social Contribution tax), as follows:


	2017			2016
Deferred tax assets
Tax loss carryforwards		524			290
Provisions		1,093			1,027
Post-retirement obligations		1,179			1,175
Estimated provision for doubtful receivables		207			229
Taxes with suspended liability		14			202
Paid concession		8			8
Adjustment to fair value: Swap/loss		13			—
Others		14			22

Total		3,052			2,953

Deferred tax liabilities
Funding cost		(31	)		(45	)
Deemed cost		(276	)		(268	)
Cost of acquisition of equity interests		(464	)		(481	)
Borrowing costs capitalized		(166	)		(149	)
Taxes on revenues not redeemed – Presumed Profit accounting method		(1	)		(2	)
Transmission assets: Indemnity gain		(937	)		(517	)
Adjustment to expectation of cash flow from the indemnifiable Financial assets of the distribution concession		—			(271	)
Others		(41	)		(5	)

Total		(1,916	)		(1,738	)

Total, net		1,136			1,215

Total assets		1,871			1,797
Total liabilities		(735	)		(582	)

Summary of Changes in Deferred Income and Social Contribution Taxes

The changes in deferred income and Social Contribution taxes were as follows:


Balance at December 31, 2014	635

Effects allocated to Statement of income	(12	)
Effects allocated to Statement of comprehensive income	191
Realized	(5	)

Balance at December 31, 2015	809

Effects allocated to Statement of income	141
Effects allocated to Statement of comprehensive income	265

Balance at December 31, 2016	1,215

Effects allocated to Statement of income	(198	)
Effects allocated to Statement of comprehensive income	133
Variations in deferred tax assets and liabilities	(14	)

Balance at December 31, 2017	1,136

Summary of Estimated Balance of Deferred Tax Asset

The Company estimated that the balance of deferred tax asset on December 31, 2017 will be realized, as follows:


2018			421
2019			477
2020			476
2021			452
2022			465
2023–2025			493
2026–2027			268

			3,052

Summary of Reconciliation of Statutory on Income and Social Contribution Taxes

This table reconciles the statutory income tax (rate 25%) and social contribution tax (rate 9%) with the current income tax expense in the Statement of income:


	2017			2016			2015
Profit before income and Social Contribution taxes		1,646			367			3,362
Income tax and Social Contribution tax – nominal expense		(560	)		(125	)		(1,143	)
Tax effects applicable to:
Gain (loss) in subsidiaries by equity method (net of effects of Interest on Equity)		(129	)		(132	)		105
Interest on Equity		—			129			68
Gain on formation of Aliança Geração		—			—			87
Gain on dilution of an equity interest		8			—			—
Deduction – Intangible assets of concession amortized – capital gain –Taesa		—			20			—
Non-deductible contributions and donations		(6	)		(4	)		(7	)
Tax incentives		11			3			43
Tax credits not recognized		—			5			(1	)
Difference between Presumed Profit and Real Profit		81			126			25
Non-deductible penalties		(14	)		(16	)		(10	)
Excess reactive power and demand		(2	)		(12	)		(11	)
Write-down of part of estimated losses for doubtful debtors		—			(22	)		(32	)
Others		(33	)		(5	)		(17	)

Income tax and Social Contribution – effective gain (expense)		(644	)		(33	)		(893	)

Current tax		(446	)		(174	)		(881	)
Deferred tax		(198	)		141			(12	)

		(644	)		(33	)		(893	)
Effective rate		39.13	%		8.99	%		26.56	%