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INCOME TAXES | 12 Months Ended
--- | ---
Dec. 31, 2019
Income Taxes [Abstract] |
INCOME TAXES | NOTE 8 – INCOME TAXES 8.1 – INCOME TAX RECOGNIZED IN PROFIT AND LOSS
|  | For the year ended December 31,
|  | 2019 |  | 2018 |  | 2017
Tax expense: |  |  |  |  |  |  |  |  |
Current tax expense |  | (19,327 | ) |  | (23,324 | ) |  | (14,053 | )
Deferred tax gain (1) |  | 4,310 |  |  | 7,456 |  |  | 5,972 |
TOTAL INCOME TAX EXPENSE |  | (15,017 | ) |  | (15,868 | ) |  | (8,081 | )
(1) | As of December 31, 2017, includes 1,004 of deferred tax gain related to changes in tax rates.
Most of the revenues are generated through subsidiaries located in the U.S. The Company's workforce is mainly located in Latin America and to a lesser extent in India and U.S. The following table provides a reconciliation of the statutory tax rate to the effective tax rate. As the operations of the Argentine subsidiaries are the most significant source of net taxable income of the Company, the following reconciliation has been prepared using the Argentine tax rate:
|  | For the year ended December 31,
|  | 2019 |  | 2018 |  | 2017
Profit before income tax |  | 69,032 |  |  | 67,464 |  |  | 38,544 |
Tax rate (note 3.7.1.1) |  | 30 | % |  | 30 | % |  | 35 | %
Income tax expense |  | (20,710 | ) |  | (20,239 | ) |  | (13,490 | )
Permanent differences |  |  |  |  |  |  |  |  |
Argentine Software Promotion Regime (note 3.7.1.1) |  | 3,256 |  |  | 6,844 |  |  | 3,541 |
Effect of different tax rates of subsidiaries operating in countries other than Argentina |  | 7,996 |  |  | 4,352 |  |  | 2,019 |
Non-deductible expenses |  | 925 |  |  | 1,130 |  |  | 1,187 |
Tax loss carry forward not recognized |  | (2,402 | ) |  | (1,462 | ) |  | (374 | )
Exchange difference |  | (4,365 | ) |  | (8,777 | ) |  | (860 | )
Other |  | 283 |  |  | 2,284 |  |  | (104 | )
INCOME TAX EXPENSE RECOGNIZED IN PROFIT AND LOSS |  | (15,017 | ) |  | (15,868 | ) |  | (8,081 | )
8.2 – DEFERRED TAX ASSETS AND LIABILITIES
|  | As of December 31,
|  | 2019 |  | 2018
Share-based compensation plan |  | 11,587 |  |  | 4,731 |
Provision for vacation and bonus |  | 6,533 |  |  | 6,624 |
Intercompany trade payables |  | 3,553 |  |  | 2,207 |
Property and equipment |  | 1,163 |  |  | 716 |
Goodwill |  | (1,752 | ) |  | (1,005 | )
Contingencies |  | 714 |  |  | 546 |
Others |  | 3,031 |  |  | 1,236 |
Loss carryforward (1) |  | 2,039 |  |  | 1,861 |
TOTAL DEFERRED TAX ASSETS |  | 26,868 |  |  | 16,916 |
|  | As of December 31,
|  | 2019 |  | 2018
Other Assets |  | (1,028 | ) |  | — |
TOTAL DEFERRED TAX LIABILITIES |  | (1,028 | ) |  | — |
(1) | As of December 31, 2019 and 2018, the detail of the loss carryforward is as follows:
|  | 2019 |  | 2018
Company |  | Loss carryforward |  | Expiration date |  | Loss carryforward |  | Expiration date
Globant S.A. |  | — |  |  |  |  | 547 |  |  | does not expire
Dynaflows S.A. |  | 138 |  |  | 2024 |  | 96 |  |  | 2020
Dynaflows S.A. |  | 53 |  |  | 2023 |  | — |  |  |
Dynaflows S.A. |  | 4 |  |  | 2022 |  | — |  |  |
IAFH Global S.A |  | 594 |  |  | 2024 |  | — |  |  |
Globant Brasil Consultoría Ltda. (2) |  | 767 |  |  | does not expire |  | 887 |  |  | does not expire
Sistemas UK Limited |  | — |  |  | — |  | 116 |  |  | does not expire
We Are London Limited |  | 163 |  |  | does not expire |  | 215 |  |  | does not expire
Difier S.A |  | 3 |  |  | does not expire |  | — |  |  |
Sistemas Globales S.A. |  | 25 |  |  | 2023 |  | — |  |  |
Avanxo S.A. |  | 129 |  |  | 2024 |  | — |  |  |
BSF S.A. |  | 140 |  |  | 2024 |  | — |  |  |
Avanxo - Sucursal del Perú |  | 20 |  |  | 2022 |  | — |  |  |
Globant France S.A.S. |  | 3 |  |  | does not expire |  | — |  |  |
|  | 2,039 |  |  |  |  | 1,861 |  |  |
(2) | The amount of the carryforward that can be utilized for Globant Brasil Consultoría Ltda. is limited to 30% of taxable income in each carryforward year.
As of December 31, 2019, no deferred tax liability has been recognised on investments in subsidiaries. The Company has concluded it has the ability and intention to control the timing of any distribution from its subsidiaries and it is probable that will be no reversal in the foreseeable future in a way that would result in a charge to taxable profit. The roll forward of the deferred tax assets/(liabilities) presented in the consolidated financial position is as follows:
2019 |  | Opening |  | Recognised in |  | Recognised in |  | Recognised |  | Acquisitions/ |  | Additions from |  | Closing
|  | balance |  | profit or loss (*) |  | other comprehensive |  | directly in equity |  | disposals |  | business combinations |  | balance
|  |  |  |  |  | income |  |  |  |  |  |  |  |
Deferred tax assets/(liabilities) in relation to: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Share-based compensation plan |  | 4,731 |  |  | 718 |  |  | — |  |  | 9,864 |  |  | (3,726 | ) |  | — |  |  | 11,587 |
Provision for vacation and bonus |  | 6,624 |  |  | (275 | ) |  | — |  |  | — |  |  | — |  |  | 184 |  |  | 6,533 |
Intercompany trade payables |  | 2,207 |  |  | 1,346 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 3,553 |
Property and equipment |  | 716 |  |  | 447 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,163 |
Goodwill |  | (1,005 | ) |  | (747 | ) |  | — |  |  | — |  |  | — |  |  | — |  |  | (1,752 | )
Contingencies |  | 546 |  |  | 168 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 714 |
Other assets |  | — |  |  | (389 | ) |  | — |  |  | — |  |  | — |  |  | (639 | ) |  | (1,028 | )
Others |  | 1,236 |  |  | 1,795 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 3,031 |
Subtotal |  | 15,055 |  |  | 3,063 |  |  | — |  |  | 9,864 |  |  | (3,726 | ) |  | (455 | ) |  | 23,801 |
Loss carryforward |  | 1,861 |  |  | 876 |  |  | (698 | ) |  | — |  |  | — |  |  | — |  |  | 2,039 |
TOTAL |  | 16,916 |  |  | 3,939 |  |  | (698 | ) |  | 9,864 |  |  | (3,726 | ) |  | (455 | ) |  | 25,840 |
(*) Includes foreign exchange loss of 371.
2018 |  | Opening |  | Recognised in |  | Recognised in |  | Recognised |  | Acquisitions/ |  | Closing
|  | balance |  | profit or loss (*) |  | other comprehensive |  | directly in equity |  | disposals |  | balance
|  |  |  |  |  | income |  |  |  |  |  |
Deferred tax assets/(liabilities) in relation to: |  |  |  |  |  |  |  |  |  |  |  |
Share-based compensation plan |  | 5,772 |  |  | 915 |  |  | — |  |  | 2,367 |  |  | (4,323 | ) |  | 4,731 |
Provision for vacation and bonus |  | 1,309 |  |  | 5,315 |  |  | — |  |  | — |  |  | — |  |  | 6,624 |
Intercompany trade payables |  | 3,126 |  |  | (919 | ) |  | — |  |  | — |  |  | — |  |  | 2,207 |
Property and equipment |  | 756 |  |  | (40 | ) |  | — |  |  | — |  |  | — |  |  | 716 |
Goodwill |  | (479 | ) |  | (526 | ) |  | — |  |  | — |  |  | — |  |  | (1,005 | )
Contingencies |  | — |  |  | 546 |  |  | — |  |  | — |  |  | — |  |  | 546 |
Others |  | 297 |  |  | 939 |  |  | — |  |  | — |  |  | — |  |  | 1,236 |
Subtotal |  | 10,781 |  |  | 6,230 |  |  | — |  |  | 2,367 |  |  | (4,323 | ) |  | 15,055 |
Loss carryforward |  | 2,405 |  |  | 321 |  |  | (165 | ) |  | — |  |  | (700 | ) |  | 1,861 |
TOTAL |  | 13,186 |  |  | 6,551 |  |  | (165 | ) |  | 2,367 |  |  | (5,023 | ) |  | 16,916 |
(*) Includes foreign exchange loss of 905.

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