XML 37 R14.htm IDEA: XBRL DOCUMENT
v3.21.1

INCOME AND SOCIAL CONTRIBUTION TAXES | 12 Months Ended
--- | ---
Dec. 31, 2020
INCOME AND SOCIAL CONTRIBUTION TAXES |
INCOME AND SOCIAL CONTRIBUTION TAXES | NOTE 8 — INCOME AND SOCIAL CONTRIBUTION TAXES In Brazil, income taxes include federal income tax (IR) and social contribution (CS), which represents an additional federal income tax. The statutory rates for income tax and social contribution are 25% and 9%, respectively, and are applicable for the years ended December 31, 2020, 2019 and 2018. The foreign subsidiaries of the Company are subject to taxation at rates ranging between 23% and 34%, without considering there are subsidiaries abroad with zero tax rate, which have mainly financial activities. The differences between the Brazilian tax rates and the rates of other countries are presented under “Difference in tax rates in foreign companies” in the reconciliation of income tax and social contribution below. a) Reconciliations of income and social contribution taxes at statutory rates to amounts presented in the Statement of Income are as follows:
|  | 2020 |  | 2019 |  | 2018 |
Income (loss) before income taxes |  | 3,495,678 |  | 1,674,720 |  | 2,157,431 |
Statutory tax rates |  | 34 | % | 34 | % | 34 | %
Income and social contribution taxes at statutory rates |  | (1,188,531) |  | (569,405) |  | (733,527) |
Tax adjustment with respect to: |  |  |  |  |  |  |
- Difference in tax rates in foreign companies |  | 530,715 |  | 75,428 |  | 663,116 |
- Equity in earnings of unconsolidated companies |  | 51,873 |  | (5,797) |  | 3,448 |
- Interest on equity* |  | 98,739 |  | 69 |  | 128,418 |
- Tax credits and incentives |  | 31,800 |  | 8,852 |  | 9,531 |
- Deferred tax assets not recognized |  | (592,861) |  | - |  | - |
- Recognition of previously unrecognized tax losses |  | 4,944 |  | 1,097 |  | 47,545 |
- Other permanent differences, net |  | (44,303) |  | 31,923 |  | 50,420 |
Income and social contribution taxes |  | (1,107,624) |  | (457,833) |  | 168,951 |
Current |  | (908,051) |  | (240,400) |  | (629,209) |
Deferred |  | (199,573) |  | (217,433) |  | 798,160 |
(*) Brazilian Law 9,249/95 provides that a company may, at its sole discretion, consider dividends distributions to shareholders to be considered as interest on own capital — subject to specific limitations - which has the effect of a taxable deduction in the determination of income tax and social contribution. The limitation is the greater of (i) shareholders’ equity multiplied by the TJLP (Long Term Interest Rate) rate or (ii) 50% of the net income in the fiscal year. This expense is not recognized for the purpose of preparing the financial statements and therefore does not impact net income. b) Breakdown and changes in deferred income and social contribution tax assets and liabilities at statutory tax rates:
|  | Balance as of |  | Recognized in |  | Acquisition of |  | Comprehensive |  | Balance as of
|  | December 31, 2019 |  | income |  | subsidiary |  | Income |  | December 31, 2020
Tax loss carryforward |  | 1,341,464 |  | (157,207) |  | - |  | 36,228 |  | 1,220,485
Social contribution tax losses |  | 350,810 |  | (60,534) |  | - |  | - |  | 290,276
Provision for tax, civil and labor liabilities |  | 242,794 |  | 140,871 |  | - |  | 1,798 |  | 385,463
Benefits granted to employees |  | 294,031 |  | (6,848) |  | - |  | 105,074 |  | 392,257
Other temporary differences |  | 575,719 |  | (114,627) |  | - |  | 40,022 |  | 501,114
Deferred exchange variance* |  | 1,177,428 |  | (119,178) |  | - |  | (709) |  | 1,057,541
Provision for losses |  | 23,618 |  | 11,740 |  | - |  | 162 |  | 35,520
Fair value adjustments on businesses acquired |  | (452,058) |  | 106,210 |  | (86,093) |  | (118,923) |  | (550,864)
|  | 3,553,806 |  | (199,573) |  | (86,093) |  | 63,652 |  | 3,331,792
Non-current assets |  | 4,071,219 |  |  |  |  |  |  |  | 3,393,354
Non-current liabilities |  | (517,413) |  |  |  |  |  |  |  | (61,562)
* Corresponds to deferred taxes over foreign exchange gains and loss which certain subsidiaries elected to tax on a cash basis
|  | Balance as of |  | Recognized in |  |  |  | Comprehensive |  | Balance as of
|  | December 31, 2018 |  | income |  | Others |  | Income |  | December 31, 2019
Tax loss carryforward |  | 1,339,933 |  | 4,781 |  | (36,226) |  | 32,976 |  | 1,341,464
Social contribution tax losses |  | 337,258 |  | 13,552 |  | - |  | - |  | 350,810
Provision for tax, civil and labor liabilities |  | 270,417 |  | (27,848) |  | - |  | 225 |  | 242,794
Benefits granted to employees |  | 286,494 |  | (29,739) |  | - |  | 37,276 |  | 294,031
Other temporary differences |  | 525,818 |  | 73,067 |  | - |  | (23,166) |  | 575,719
Deferred exchange variance* |  | 1,284,377 |  | (106,640) |  | - |  | (309) |  | 1,177,428
Provision for losses |  | 83,837 |  | (75,142) |  | - |  | 14,923 |  | 23,618
Fair value adjustments on businesses acquired |  | (372,448) |  | (69,464) |  | - |  | (10,146) |  | (452,058)
|  | 3,755,686 |  | (217,433) |  | (36,226) |  | 51,779 |  | 3,553,806
Non-current assets |  | 3,874,054 |  |  |  |  |  |  |  | 4,071,219
Non-current liabilities |  | (118,368) |  |  |  |  |  |  |  | (517,413)
*Corresponds to deferred taxes over foreign exchange gains and loss which certain subsidiaries elected to tax on a cash basis
|  | Balance as of |  | Recognized in |  |  |  | Comprehensive |  | Balance as of
|  | January 1, 2018 |  | income |  | Others |  | Income |  | December 31, 2018
Tax loss carryforward |  | 973,638 |  | 341,664 |  | 36,445 |  | (11,814) |  | 1,339,933
Social contribution tax losses |  | 355,782 |  | (18,524) |  | - |  | - |  | 337,258
Provision for tax, civil and labor liabilities |  | 275,463 |  | (5,214) |  | 168 |  | - |  | 270,417
Benefits granted to employees |  | 282,803 |  | (16,564) |  | 67,184 |  | (46,929) |  | 286,494
Other temporary differences |  | 410,300 |  | 93,094 |  | 17,177 |  | 5,247 |  | 525,818
Deferred exchange variance* |  | 1,060,527 |  | 223,850 |  | - |  | - |  | 1,284,377
Provision for losses |  | 110,728 |  | (33,165) |  | (12) |  | 6,286 |  | 83,837
Fair value adjustments on businesses acquired |  | (497,534) |  | 213,019 |  | (89,859) |  | 1,926 |  | (372,448)
|  | 2,971,707 |  | 798,160 |  | 31,103 |  | (45,284) |  | 3,755,686
Non-current assets |  | 3,054,393 |  |  |  |  |  |  |  | 3,874,054
Non-current liabilities |  | (82,686) |  |  |  |  |  |  |  | (118,368)
*Corresponds to deferred taxes over foreign exchange gains and loss which certain subsidiaries elected to tax on a cash basis The recoverability analysis of deferred tax balances related to tax loss carryforward and social contribution tax losses performed by the Company are based on its business plans and aligned with other projections and analysis performed by the Company as, for example, the impairment of assets tests. c) Estimated recovery and reversal of income and social contribution tax assets and liabilities are as follows:
|  | Assets
|  | 2020 |  | 2019
2020 |  | - |  | 605,657
2021 |  | 616,409 |  | 467,153
2022 |  | 399,248 |  | 422,863
2023 |  | 391,610 |  | 464,514
2024 |  | 348,139 |  | 472,734
2025 and after |  | 1,637,948 |  | 1,638,298
|  | 3,393,354 |  | 4,071,219
|  | Liabilities
|  | 2020 |  | 2019
2021 |  | (8,558) |  | (98,449)
2022 |  | (8,192) |  | (110,031)
2023 |  | (14,815) |  | (90,703)
2024 |  | (3,145) |  | (79,022)
2025 and after |  | (26,852) |  | (139,208)
|  | (61,562) |  | (517,413)
d) Unrecognized deferred income tax assets: Due to the lack of expectation to use tax losses, negative social contribution base and deferred exchange variation arising from some operations in Brazil, the Company did not recognize a portion of tax assets of R$ 764,845 (R$ 263,491 on December 31, 2019), which do not have an expiration date. The subsidiaries abroad had R$ 1,180,067 (R$ 668,729 as of December 31, 2019) of tax credits on capital losses for which deferred tax assets have not been booked and which expire between 2029 and 2035 and also several tax losses of state credits in the amount of R$ 1,623,459 (R$ 1,384,598 as of December 31, 2019), which expire at various dates between 2021 and 2035.

X
- Definition The entire disclosure for income taxes. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Name IAS -Number 12 -IssueDate 2020-01-01 -Section Disclosure -URI http://eifrs.ifrs.org/eifrs/xifrs-link?type=IAS&num=12&code=ifrs-tx-2020-en-r&doctype=Standard&dita_xref=IAS12_g79-88_TI -URIDate 2020-01-01 + Details
Name: | ifrs-full_DisclosureOfIncomeTaxExplanatory
Namespace Prefix: | ifrs-full_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | ifrs-full_MajorComponentsOfTaxExpenseIncomeAbstract
Namespace Prefix: | ifrs-full_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration