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INCOME AND MINING TAXES
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
INCOME AND MINING TAXES INCOME AND MINING TAXES
The following tables represent the major components of Income before taxes and Income and mining tax benefit (expense) recognized in the Consolidated Statements of Operations (in thousands):
Years Ended December 31,
202220212020
Income before income and mining taxes components:
     
United States$75,762 
$
138,230 $119,654 
Canada(21,831)26,752 26,207 
Türkiye 108,373  186,971  41,385 
Other Foreign78,531 62,805 14,545 
Total income before incomes taxes
$240,835 
$
414,758 $201,791 
Years Ended December 31,
202220212020
Current income tax provision:
United States
$
15,149 $15,603 $13,945 
Canada33,408 27,672 5,720 
Türkiye23,515 49,851 1,805 
Other Foreign25,928 23,328 1,074 
Total current income tax provision98,000 116,454 22,544 
Deferred income tax provision (benefit):
United States
7,092 13,288 8,265 
Canada(4,183)(230)765 
Türkiye(57,227)(131,456)19,205 
Other foreign(13,614)(12,172)(7,576)
Total deferred income tax provision (benefit)
(67,932)(130,570)20,659 
Total income tax provision (benefit)
$
30,068 $(14,116)$43,203 
Income and mining tax expense differs from the amount that would be computed by applying the Canadian statutory rate of 27% for each of the years ended December 31, 2022, 2021 and 2020, respectively, to income before income and mining taxes. The reasons for the differences are as follows (in thousands):
Years Ended December 31,
202220212020
Income before income and mining taxes
$
240,835$414,758$201,791
Statutory tax rate27 %27 %27 %
Expected income and mining tax expense
65,025111,98554,484
Increase (decrease) attributable to:
Non-taxable items(11,358)(4,379)(22,236)
Foreign exchange and inflation
(20,531)(124,946)(676)
Differences in foreign and future tax rates(13,248)738(10,641)
Investment incentive tax credits(10,126)(14,082)1,983
Mining taxes and overseas withholding tax
38,25117,52817,006
Impact of gain on acquisition of Kartaltepe(18,826)——
Change in estimates in respect of prior years(3,630)(2,046)(1,616)
Changes in recognition of deferred tax assets2,6021,0863,550
Other1,909—1,349
Total income and mining tax expense
$30,068$(14,116)$43,203
The significant components of Deferred income tax assets and Deferred income tax liabilities were (in thousands):
December 31,
20222021
Deferred income tax assets
Deductible temporary differences relating to:    
Marketable securities
$2,397 $634 
Reclamation liabilities
 31,080  27,608 
Lease liabilities
 28,730  23,895 
Deductibility of other taxes
 10,224  9,299 
Stock-based compensation
 2,931  7,247 
Other items
 13,286  16,595 
  88,648  85,278 
Investment incentive tax credits (1)
 18,772  46,354 
Tax loss carryforwards
 43,384  25,395 
Less: Valuation allowance  
 (61,101) (38,496)
Total deferred income tax assets
$89,703 $118,531 
  
Deferred income tax liabilities 
Taxable temporary differences relating to:
 
Marketable securities
$— $(270)
Inventories
 (49,004) (17,768)
Mineral properties, plant and equipment
 (332,886) (365,793)
Convertible notes
 (95) (359)
Mineral tax
 (41,803) (38,452)
Foreign withholding tax
 —  (17,080)
Other items
 (6,401) (9,096)
Total deferred income tax liabilities
$
(430,189)
$
(448,818)
     
Balance sheet presentation    
Deferred income tax assets
$1,915 $8,501 
Deferred income tax liabilities
 (342,401) (338,788)
Deferred income tax liabilities, net
$(340,486)$(330,287)
(1)The Company receives investment incentive tax credits for qualifying capital expenditures at Çöpler. The application of these tax credits, which are denominated in Turkish Lira, reduced income and mining tax expense and cash tax payments for the year ended December 31, 2022 and are expected to offset future cash tax payments. Reviews of eligible expenditures for tax credits by local tax authorities occur periodically and can result in adjustments to the recognition of investment incentive tax credits.
As of December 31, 2022, the Company had deferred tax liabilities related to investments in subsidiaries that were not recognized as the Company controls the dividend policy of its subsidiaries (i.e., the Company controls the timing of reversal of the related taxable temporary differences and is satisfied that they will not reverse in the foreseeable future). It is not practicable to determine the amount of the unrecognized deferred tax liabilities at this time.
Valuation of deferred tax assets
The Company recognizes tax benefits on losses or other deductible amounts generated in countries where it determines that it is more likely than not that taxable profits will be available to be utilized against those temporary differences. The Company's deferred tax valuation allowance related primarily to tax losses in jurisdictions which do not meet the “more-likely-than-not” standard under current accounting guidance due to insufficient positive taxable income to utilize available tax losses.
When there is a change in judgment concerning the recovery of deferred tax assets in future periods, a valuation allowance is recorded into earnings during the quarter in which the change in judgment occurs. The Company has not made any judgement changes with respect to its already established positions. The valuation allowance increased in 2022 by $22.6 million mainly related to an increase in net operating and capital loss carryforwards in entities where the Company does not expect to realize a future tax benefit.
Tax loss carryforwards
As of December 31, 2022, the Company had the following estimated tax operating and capital losses (in thousands) available to reduce future taxable income, including both losses for which deferred tax assets are utilized to offset applicable deferred tax liabilities and losses for which deferred tax assets have a valuation allowance against. Losses expire at various dates and amounts between 2023 and 2042.
December 31, 2022
Expiration Year
Mexico$511 2023-2032
Canada
$
179,935 2040-2042
U.S.A.
$
7,382 2023-Indefinite
Argentina
$
5,692 2026-2027
Türkiye$7,621 2026-2027
Peru$263 Indefinite
Unrecognized tax benefits
The Company records uncertain tax positions on the basis of a two-step process in which (1) the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions meeting the “more-likely-than-not” recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority.
A reconciliation of the beginning and ending amount of gross unrecognized tax benefits, inclusive of interest and penalties, is as follows during the years ended December 31 (in thousands):
20222021
Balance as of January 1$— $— 
Increase associated with tax positions taken during the current year— — 
Increase (decrease) associated with tax positions taken during a prior year (1)
9,200 — 
Settlements(626)— 
Decrease associated with lapses in statutes of limitation— — 
Balance as of December 31$8,574 $— 

(1) Of the gross unrecognized tax benefits, $8.6 million were recognized as current liabilities in Condensed Consolidated Balance Sheet as of December, 31, 2022.
As of December 31, 2022 and December 31, 2021, $8.6 million and $0, respectively, represent the amount of unrecognized tax benefits, inclusive of interest and penalties that, if recognized, would impact the Company’s effective income tax rate.
As of December 31, 2022, the total amount of accrued income-tax-related interest and penalties included in the Condensed Consolidated Balance Sheets was $5.2 million. The Company believes it is reasonably possible that the total amount of the unrecognized tax benefit of $8.6 million will be settled in the next 12 months. During the year ended December 31, 2022, the Company recorded $6.6 million of interest and penalties in Income and mining tax benefit (expense) in the Condensed Consolidated Statements of Operations. No amounts were accrued during the year ended December 31, 2021.
The Company files income tax returns in the U.S. federal jurisdiction, Canada, Türkiye, Argentina and various state, provincial and foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. Federal, state and local, and non-US income tax examinations for years before 2017. The Company is currently litigating with respect to withholding tax on distributions from its Turkish operation.