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Income Taxes | 12 Months Ended
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Dec. 31, 2022
Disclosure Of Income Tax Text Block Abstract |
Income taxes |
| 16. | Income taxes
The Company is subject to Income Tax (ISR). The analysis of the income tax charged to the results of 2022, 2021 and 2020 is as follows:
|  | 2022 |  |  | 2021 |  |  | 2020 |
Income tax of the year for Mexican companies |  | $ | 2,549,851 |  |  | $ | 2,564,312 |  |  | $ | 1,460,057 |
Income tax year for foreign companies |  |  | 599,940 |  |  |  | 1,253,895 |  |  |  | 370,860 |
Deferred tax for Mexican companies |  |  | (119,999 | ) |  |  | (96,453 | ) |  |  | (94,604 | )
Deferred tax for foreign companies |  |  | 269,730 |  |  |  | 668,015 |  |  |  | 341,531 |
|  | $ | 3,299,522 |  |  | $ | 4,389,769 |  |  | $ | 2,077,844 |
During 2022, 2021 and 2020, 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:
|  | 2022 |  |  | 2021 |  |  | 2020 |
Expected benefit, expense |  | $ | 3,300,413 |  |  | $ | 4,084,348 |  |  | $ | 1,462,776 |
Increase (decrease) as a result of: |  |  |  |  |  |  |  |  |  |  |  |
Inflation effect, net |  |  | (524,640 | ) |  |  | (577,234 | ) |  |  | (139,134 | )
Impact of the nominal rate differences between the USA and Mexico |  |  | 29,996 |  |  |  | 66,343 |  |  |  | 11,075 |
Benefit from utilization of tax loss carry-forwards and others (1) |  |  | 80,166 |  |  |  | (12,086 | ) |  |  | 16,173 |
Others, net (includes permanent items) Income tax expense (2) |  |  | 413,587 |  |  |  | 828,398 |  |  |  | 172,519 |
Income tax expense |  | $ | 3,299,522 |  |  | $ | 4,389,769 |  |  | $ | 1,523,409 |
Effective tax rate |  |  | 29.99 | % |  |  | 31.73 | % |  |  | 31.24 | %
| (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 2022, 2021 and 2020 , less the effect of tax losses incurred by some subsidiaries for which no deferred tax asset was recorded.
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, 2022, 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 |  |  |  | 7,793 |
| 2014 |  |  |  | 2024 |  |  |  | 8,729 |
| 2015 |  |  |  | 2025 |  |  |  | 11,036 |
| 2016 |  |  |  | 2026 |  |  |  | 386,277 |
| 2017 |  |  |  | 2027 |  |  |  | 303,647 |
| 2018 |  |  |  | 2028 |  |  |  | 68,360 |
| 2019 |  |  |  | 2029 |  |  |  | 953,370 |
| 2020 |  |  |  | 2030 |  |  |  | 961,943 |
| 2021 |  |  |  | 2031 |  |  |  | 1,402,495 |
| 2022 |  |  |  | 2032 |  |  |  | 922,370 |
|  |  |  |  |  |  |  | $ | 5,026,020 |
As of December 31, 2022, Republic had USD$ 316.1 million of tax losses pending to amortize for federal tax purposes, of those USD $119.4 million are undefined and USD $196.7 million expire between 2033 and 2038; USD$ 280.1 million of tax losses for state and local purposes that expire between 2022 and 2040 and approximately USD$ 6.6 million of tax losses at the subsidiary located in Canada, which expire between 2032 and 2040. As of December 31, 2022, GV do Brasil Industria e Comercio of Aço LTDA, a subsidiary established in Brazil, had R$ 16.546 million Brazilian Reals ($ 60 million of Mexican pesos) of tax losses pending to amortize for federal tax purposes, which do not have an expiration date. 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, |
|  | 2022 |  |  | 2021 |
Deferred tax assets: |  |  |  |  |  |
Allowance for doubtful accounts |  | $ | (67,930 | ) |  | $ | (64,511 | )
Advances from customers |  |  | 464,268 |  |  |  | 359,795 |
Deferred tax assets |  |  | 396,338 |  |  |  | 295,284 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Property, plant and equipment |  |  | 4,209,513 |  |  |  | 3,926,450 |
Intangible assets from Grupo San |  |  | 381,282 |  |  |  | 353,661 |
Provisions |  |  | 17,199 |  |  |  | 76,601 |
Prepaid expenses |  |  | 11,493 |  |  |  | 43,696 |
Total deferred liabilities |  |  | 4,619,487 |  |  |  | 4,400,408 |
Deferred tax liabilities, net |  | $ | 4,223,149 |  |  | $ | 4,105,124 |

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