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Income Taxes

9 Months Ended

Sep. 30, 2019

Income Tax Disclosure [Abstract]

Income Taxes

Note 9. Income Taxes

The Company files income tax returns for TG, ES and ES Metals in the Republic of Colombia. On December 28, 2018, a tax reform was implemented in Colombia which decreased the corporate income tax rate to 33% for fiscal year 2019, 32% for fiscal year 2020, 31% for fiscal year 2021 and 30% for fiscal year 2022, in comparison with a tax rate of 37% for 2018.

GM&P, Componenti and ESW LLC are U.S. entities based in Florida subject to U.S. federal and state income taxes. The estimated combined state and federal income tax rate is estimated at a rate of 26.5% based on the recently enacted U.S. Tax Reform. Tecnoglass Inc. as well as all the other subsidiaries in the Cayman Islands do not currently have any tax obligations.

The components of income tax expense are as follows:

		Three months ended September 30,								Nine months ended September 30,
		2019				2018				2019				2018
Current income tax
United States		$	(146	)		$	528			$	(1,561	)		$	1,250
Colombia			(4,411	)			(3,683	)			(12,169	)			(6,205	)
			(4,557	)			(3,155	)			(13,730	)			(4,955	)
Deferred income Tax
United States			349				(88	)			1,475				(1,249	)
Colombia			4,474				982				3,665				17
			4,823				894				5,140				(1,232	)
Total income tax benefit (provision)		$	266			$	(2,261	)		$	(8,590	)		$	(6,187	)
Effective tax rate			17	%			27	%			39	%			37	%

The Company’s weighted average statutory income tax rate is 33%. The Company’s effective income tax rate of 17% for the quarter ended September 30, 2019 differs from the weighted average statutory rate primarily as a result of a 17.3% point decrease related to permanent differences, a 10.8% decrease related to non-deductible expense, partially offset by unrealized foreign currency transaction losses which contribute to an increase of 12.1% points in the reconciliation of effective income tax rate to statutory rate.

No additional individual items contributed more than 5% points in the reconciliation of effective income tax rate to statutory tax rates during any of the periods presented.

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- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-URI http://asc.fasb.org/topic&trid=2144680

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