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Income Taxes | 12 Months Ended
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Dec. 31, 2021
Disclosure of income tax [text block] [Abstract] |
Income taxes |
| 15. | Income taxes
The Company is subject to Income Tax (ISR). The analysis of the income tax charged to the results of 2021, 2020 and 2019 is as follows:
|  | 2021 |  |  | 2020 |  |  | 2019 |
Income tax of the year for Mexican companies |  | $ | 2,564,312 |  |  | $ | 1,460,057 |  |  | $ | 3,177,506 |
Income tax year for foreign companies |  |  | 1,253,895 |  |  |  | 370,860 |  |  |  | 301,263 |
Deferred tax for Mexican companies |  |  | (96,453 | ) |  |  | (94,604 | ) |  |  | 12,978 |
Deferred tax for foreign companies |  |  | 668,015 |  |  |  | 341,531 |  |  |  | (215,473 | )
|  | $ | 4,389,769 |  |  | $ | 2,077,844 |  |  | $ | 3,276,274 |
The amount of income tax of Mexican companies includes $554,435 and $2,323,662 in 2020 and 2019 respectively, which correspond to taxes and expenses of previous years, that were covered by several corporations of the Group; these taxes were determined by tax authorities, corresponding to fiscal years 2013 to 2017, which are indicated in Note 23 (j); The Companies that covered the taxes subscribed Reparatory Agreements with the Service of Tax Administration (SAT), in relation with the audits for fiscal years 2013 to 2017, with the objective of reaching a fair agreement and in that way solve the disputes that were in the Courts indicated in Note 23 (j). With the $554,435 amount were solved, totally, the disputes that were in the Courts with tax authorities mentioned in Note 23 (j). During 2021, 2020 and 2019, the income tax expense (benefit) attributable to income was different from the one that will result for applying 30% (tax rate in Mexico) before these provisions, as a result of the items shown below:
|  | 2021 |  |  | 2020 |  |  | 2019 |
Expected benefit, expense |  | $ | 4,084,348 |  |  | $ | 1,462,776 |  |  | $ | 490,925 |
Increase (decrease) as a result of: |  |  |  |  |  |  |  |  |  |  |  |
Inflation effect, net |  |  | (577,234 | ) |  |  | (139,134 | ) |  |  | (417,960 | )
Impact of the nominal rate differences between the USA and Mexico |  |  | 66,343 |  |  |  | 11,075 |  |  |  | (23,368 | )
Benefit from utilization of tax loss carry-forwards and others (1) |  |  | (12,086 | ) |  |  | 16,173 |  |  |  | (987,135 | )
Others, net (includes permanent items) Income tax expense (2) |  |  | 828,398 |  |  |  | 172,519 |  |  |  | 1,890,150 |
Income tax expense |  | $ | 4,389,769 |  |  | $ | 1,523,409 |  |  | $ | 952,612 |
Effective tax rate |  |  | 31.73 | % |  |  | 31.24 | % |  |  | 58.21 | %
(1) | This amount corresponds to the income tax benefit obtained by those companies that used tax loss carry-forwards in the years presented that were generated previously to 2021, 2020 and 2019, less the effect of tax losses incurred by some subsidiaries for which no deferred tax asset was recorded.
(2) | For the purpose of determining the effective tax rate, the payments corresponding to taxes from previous years and expenses that were paid by various group companies derived from repair agreements during 2020 and 2019 fiscal years were not considered within the income tax expense.
The Company has tax losses in some Mexican subsidiaries which, according to the ISR law in Mexico, can be amortized to reduce taxable income generated over the following ten years. Tax losses can be updated following certain procedures established in the law. As of December 31, 2021, Grupo Simec, S.A.B. de C.V. and certain of its Mexican subsidiaries have updated tax losses pending of amortize as follows:
Origin Date |  |  | Expiration Date |  | Tax losses available |
2013 |  |  | 2023 |  |  | 3,823 |
2014 |  |  | 2024 |  |  | 2,635 |
2015 |  |  | 2025 |  |  | 8,988 |
2016 |  |  | 2026 |  |  | 316,818 |
2017 |  |  | 2027 |  |  | 329,500 |
2018 |  |  | 2028 |  |  | 97,980 |
2019 |  |  | 2029 |  |  | 886,466 |
2020 |  |  | 2030 |  |  | 898,711 |
2021 |  |  | 2031 |  |  | 1,632,449 |
|  |  |  |  | $ | 4,177,370 |
As of December 31, 2021, Republic had USD$ 320.2 million of tax losses pending to amortize for federal tax purposes, of those USD $189.2 million are undefined and USD $200.3 million expire between 2033 and 2038; USD$ 319.2 million of tax losses for state and local purposes that expire between 2021 and 2040 and approximately USD$ 6.7 million of tax losses at the subsidiary located in Canada, which expire between 2032 and 2040. As of December 31, 2021, GV do Brasil Industria e Comercio of Aço LTDA, a subsidiary established in Brazil, had R$ 85.167 million Brazilian Reals ($ 313 million of Mexican pesos) of tax losses pending to amortize for federal tax purposes, which do not have an expiration date. As of December 31, 2021, Companhia Siderúrgica do Espirito Santo S.A., a subsidiary established in Brazil, had R$ 0.0 million Brazilian Reals (0 million of Mexican pesos) of tax losses pending of amortize for federal tax purposes. Below is a summary of the effects of the main temporary differences comprising the deferred income tax liability included in the consolidated statements of financial position.
|  | December 31, |
|  | 2021 |  |  | 2020 |
Deferred tax assets: |  |  |  |  |  |  |  |
Allowance for doubtful accounts |  | $ | (64,511 | ) |  | $ | (61,536 | )
Advances from customers |  |  | 359,795 |  |  |  | 283,846 |
Deferred tax assets |  |  | 295,284 |  |  |  | 222,310 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Property, plant and equipment |  |  | 3,926,450 |  |  |  | 3,321,941 |
Intangible assets from Grupo San |  |  | 353,661 |  |  |  | 329,600 |
Provisions |  |  | 76,601 |  |  |  | 202,407 |
Prepaid expenses |  |  | 43,696 |  |  |  | 6,883 |
Total deferred liabilities |  |  | 4,400,408 |  |  |  | 3,860,831 |
Deferred tax liabilities, net |  | $ | 4,105,124 |  |  | $ | 3,638,521 |

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