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Income taxes
 12 Months Ended
Dec. 31, 2020
Text block [abstract]  
Income taxes
22.
Income taxes
 
 
 
  
2020
 
 
2019
 
 
2018
 
Current taxes expense -
  
   
 
   
 
   
Current period
  
$
(14,032
) 
 
$
(55,847
) 
 
$
(35,258
) 
Adjustment for prior period
  
 
162
 
 
 
693
 
 
 
261
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
  
$(13,870)
 
 
$(55,154)
 
 
$(34,997)
 
Deferred taxes expenses -
  
   
 
   
 
   
Origination and reversal of temporary differences
  
 
37,587
 
 
 
8,717
 
 
 
467
 
 
  
 
 
 
 
 
 
 
 
 
 
 
Total income tax
  
$
23,717
 
 
$
(46,437
) 
 
$
(34,530
) 
 
  
 
 
 
 
 
 
 
 
 
 
 
During the year 2018, the deferred tax balances have been
re-measured
as a result of the change in Colombia’s income tax rate, 31% and 30% for the taxable year 2021 and 2022, respectively according to the law N°1943 published on December 28, 2018. Deferred tax expected to reverse in the year 2021, has been measured using the effective rate that will apply for Copa Airlines (25%), Copa Colombia (31%) and OVAL (21%)

The balances of deferred taxes are as follows:
 
 
  
Statement of financial
position
 
 
Statement of

profit or loss
 
 
  
2020
 
 
2019
 
 
2020
 
 
2019
 
 
2018
 
Deferred tax liabilities
  
   
 
   
 
   
 
   
 
   
Maintenance deposits
  
$
(23,891
) 
 
$
(29,863
) 
 
$
(5,972
) 
 
$
—  
 
 
$
3,277
 
Prepaid dividend tax
  
 
—  
 
 
 
(7,403
) 
 
 
(7,403
) 
 
 
(1,456
) 
 
 
(5,244
) 
Property and equipment
  
 
2,108
 
 
 
(2,896
) 
 
 
(5,004
) 
 
 
(4,500
) 
 
 
(2,136
) 
Other
  
 
(1,500
) 
 
 
(4,690
) 
 
 
(3,190
) 
 
 
(1
) 
 
 
641
 
Set off tax
  
 
1,093
 
 
 
1,455
 
 
 
362
 
 
 
414
 
 
 
(63
) 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
$
(22,190
) 
 
$
(43,397
) 
 
$
(21,207
) 
 
$
(5,543
) 
 
$
(3,525
) 
Deferred tax assets
  
   
 
   
 
   
 
   
 
   
Provision for return conditions
  
$
12,665
 
 
$
10,095
 
 
$
(2,570
) 
 
$
(2,959
) 
 
$
723
 
Air traffic liability
  
 
2,486
 
 
 
2,039
 
 
 
(447
) 
 
 
(247
) 
 
 
(511
) 
Other provisions
  
 
624
 
 
 
6,826
 
 
 
6,202
 
 
 
(2,139
) 
 
 
(271
) 
Tax loss
  
 
20,913
 
 
 
1,710
 
 
 
(19,203
) 
 
 
2,585
 
 
 
3,054
 
Set off tax
  
 
(1,093
) 
 
 
(1,455
) 
 
 
(362
) 
 
 
(414
) 
 
 
63
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
$
35,595
 
 
$
19,215
 
 
$
(16,380
) 
 
$
(3,174
) 
 
$
3,058
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
$
13,405
 
 
$
(24,182
) 
 
$
(37,587
) 
 
$
(8,717
) 
 
$
(467
) 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
At December 31, 2020 the deferred tax assets include tax losses carried forward of $11.8 million in Copa Airlines and $9.1 million in Copa Colombia ($1.7 million at December 2019). The Company has concluded that the deferred assets will be recoverable using the estimated future taxable income based on the approved business plans for the subsidiary. The Company expects to use the tax losses of Copa Airlines from 2023 for 3 years and the tax losses of Copa Colombia within the next 7 years beginning from 2022.
At December 31, 2020 the company does not have aggregate amount of temporary differences associated with investments in subsidiaries, for which deferred tax liabilities have not been recognized for the tax losses of the year (2019: $272.5 million).
Reconciliation of the effective tax rate is as follows:
 
 
  
Tax rate
 
 
2020
 
 
Tax rate
 
 
2019
 
 
Tax rate
 
 
2018
 
Net income
  
   
 
$
(607,062
) 
 
   
 
$
247,002
 
 
   
 
$
88,198
 
Total income tax expense
  
   
 
 
(23,717
) 
 
   
 
 
46,437
 
 
   
 
 
34,530
 
 
  
   
 
 
 
 
 
   
 
 
 
 
 
   
 
 
 
 
Profit excluding income tax
  
   
 
 
(630,779
) 
 
   
 
 
293,439
 
 
   
 
 
122,728
 
 
  
   
 
 
 
 
 
   
 
 
 
 
 
   
 
 
 
 
Income taxes at Panamanian statutory rates
  
 
25.0
% 
 
 
(157,695
) 
 
 
25.0
% 
 
 
73,360
 
 
 
25.0
% 
 
 
30,682
 
Stations - Taxable / Panama
  
 
(13.2
%) 
 
 
83,071
 
 
 
(13.7
%) 
 
 
(40,205
) 
 
 
(19.3
%) 
 
 
(23,745
) 
Stations - Taxable / Non Panama
  
 
(1.5
%) 
 
 
9,850
 
 
 
2.4
% 
 
 
7,043
 
 
 
9.0
% 
 
 
11,052
 
Stations - Non Taxable / Non Panama
  
 
(5.3
%) 
 
 
33,728
 
 
 
(4.9
%) 
 
 
(14,444
) 
 
 
3.3
% 
 
 
4,106
 
Dividend tax
  
 
(1.2
%) 
 
 
7,491
 
 
 
7.2
% 
 
 
21,376
 
 
 
10.3
% 
 
 
12,696
 
(Over) under provided in prior periods
  
 
0.0
% 
 
 
(162
) 
 
 
(0.2
%) 
 
 
(693
) 
 
 
(0.2
%) 
 
 
(261
) 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Provision for income taxes
  
 
3.8
% 
 
$
(23,717
) 
 
 
15.8
% 
 
$
46,437
 
 
 
28.1
% 
 
$
34,530