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Income Taxes
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
Income Taxes

 

  Note 14. Income Taxes

 

The Company files income tax returns for TG, ES and ES Metals in the Republic of Colombia. GM&P, Componenti USA LLC and ESW LLC are U.S. entities based in Florida subject to U.S. federal and state income taxes. VS files income tax returns in the Republic of Panama. Tecnoglass Inc. does not currently have any tax obligations.

 

On September 14, 2021, the Colombian Government enacted Law 2155 (the Social Investment Act), which increases the corporate income tax to 35% for fiscal year 2022 and thereafter, from the current rate of 31% for 2021 that would have decreased to 30% for 2022 under the prior tax regulation.

 

The components of income tax expense are as follows:

 

   2021   2020 
   Twelve months ended December 31, 
   2021   2020 
Current income tax          
United States  $(1,679)  $(1,385)
Colombia   (22,354)   (5,035)
Panama   (52)   (32)
Total current income tax    (24,085)   (6,452)
Deferred income Tax          
United States   (1,829)   20 
Colombia   (2,571)   (6,601)
Panama   -    - 
Total deferred income tax   (4,400)   (6,581)
Total income tax (provision)  $(28,485)  $(13,033)
           
Effective tax rate   29.4%   35.3%

 

A reconciliation of the statutory tax rate in Colombia to the Company’s effective tax rate is as follows:

 

   Year ended December 31, 
   2021   2020 
Income tax expense at statutory rates   29.6%   30.5%
Non-deductible expenses   2.4%   5.9%
Non-taxable income   -2.6%   -1.1%
Effective tax rate   29.4%   35.3%

 

No single individual item contributed significantly in the reconciliation of the Company’s effective tax rate to the statutory rate during the year ended December 31, 2020 and 2021, respectively.

 

 

The Company has the following deferred tax assets and liabilities:

 

   2021   2020 
   Year ended December 31, 
   2021   2020 
Deferred tax assets:          
Property, plant and equipment adjustments   471    480 
Tax benefit on installation of renewable energy project   201    282 
Foreign currency transactions   3,828    1,052 
Other   59    75 
Total deferred tax assets  $4,559   $1,889 
           
Deferred tax liabilities:          
Depreciation and Amortization   (4,772)   (1,931)
Other   (71)   (377)
Foreign currency transactions   (2,537)   (2,483)
Total deferred tax liabilities  $(7,380)  $(4,791)
           
Net deferred tax  $(2,821)  $(2,902)

 

Net deferred tax is presented on the balance sheet as follows:

 

   2021   2020 
   December 31, 
   2021   2020 
Long term deferred income tax asset  $596   $268 
Less: long term deferred income tax liability  $3,417   $3,170