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14 INCOME TAX AND SOCIAL CONTRIBUTION (Tables)
 12 Months Ended
Dec. 31, 2019
Income Tax And Social Contribution [Abstract]  
Schedule of income tax and social contribution income (expense)

The income tax and social contribution recognized in profit or loss for the year are as follows: 

 

  Consolidated
  12/31/2019   12/31/2018 12/31/2017
Income tax and social contribution income (expense)        
Current (1,564,622)   (827,229) (358,981)
Deferred 2,398,400   576,895 (50,128)
  833,778   (250,334) (409,109)
Schedule of reconciliation of income tax and social contribution income (expense)

The reconciliation of consolidated income tax and social contribution expenses and income and the result from applying the effective rate to profit before income tax and social contribution are as follows:

 

      Consolidated
  12/31/2019   12/31/2018   12/31/2017
           
Profit/(Loss) before income tax and social contribution 1,410,733                5,450,917                   520,338
Tax rate 34%   34%   34%
Income tax and social contribution at combined statutory rate (479,649)              (1,853,312)                 (176,915)
Adjustment to reflect the effective rate:          
Equity in results of affiliated companies 46,737   50,134   42,431
Profit with differentiated rates or untaxed (236,404)   (46,006)   37,605
Transfer pricing adjustment (18,494)   (74,836)   (34,746)
Tax loss carryforwards without recognizing deferred taxes (21,095)   (27,683)   (368,612)
Indebtdness limit (20,393)   (38,486)   (39,378)
Unrecorded deferred taxes on temporary differences (2,835)   (11,964)   541,655
(Losses)/Reversal for deferred income and social contribution tax credits 1,530,185   1,807,909   (403,080)
Income taxes and social contribution on foreign profit (14,424)   (30,219)   (29,964)
Tax incentives 39,042   36,710   14,358
Deferred taxes on exchange variation in equity     (43,667)    
Interest on equity 22,107        
Other permanent deductions (additions) (10,999)   (18,914)   7,537
Income tax and social contribution in profit for the period 833,778   (250,334)   (409,109)
Effective tax rate -59%   5%   79%
Schedule of deferred income tax and social contribution

Deferred income tax and social contribution are calculated on income tax and social contribution losses and the corresponding temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements:

 

                                  Consolidated
  12/31/2017   Movement 12/31/2018   Movement   12/31/2019
    Shareholders'
Equity		   P&L   Others   Shareholders'
Equity		   P&L   Others    
                 
Deferred                                  
Income tax losses   1,137,234       (177,378)     (616)   959,240         651,561         1,610,801
Social contribution tax losses   406,884       (39,303)     (223)   367,358         242,688           610,046
Temporary differences (2,654,558)     21,208     793,576   839 (1,838,935)     (2,357)     1,504,151   59     (337,082)
- Provision for tax. social security, labor, civil and environmental risks   356,750       (25,554)     3,184   334,380         (70,367)           264,013
- Asset impairment losses   181,463       53       181,516         915           182,431
- (Gains)/losses on financial instruments   416,747     530,292   (587,263)       359,776         54,719           414,495
- Actuarial liability (pension and healthcare plan)   273,058     (48)   3,022       276,032   38,569               314,601
- Accrued supplies and services   67,716       27,928       95,644         36,767           132,411
- Goodwill on merger   608       (608)                        
- Unrealized ex change differences (1)   1,511,152       (500,620)       1,010,532         170,969         1,181,501
- (Gain) on loss of control over Transnordestina   (92,180)               (92,180)                 (92,180)
- Cash flow hedge accounting   134,479     355,563           490,042   (63,080)               426,961
- Aquisition Fair Value SWT/CBL   (193,311)     (16,683)   37,880       (172,114)   (52,071)     39,672         (184,513)
- Deferred taxes non computed   (212,236)       (38,359)     (2,345)   (252,940)         (39,021)         (291,961)
- (Losses) estimated/ reversals to deferred taxes credits (4,130,928)     (885,069)   1,929,424     (3,086,573)   25,159     1,435,415         (1,625,998)
- Business Combination (1,040,536)       9,724     (1,030,812)         7,471         (1,023,341)
- Consolidation CBSI                         (12)   62     50
- Other   72,660     37,153   (62,051)       47,762   49,066     (132,377)   (3)     (35,552)
Total (1,110,440)     21,208     576,895    -   (512,337)     (2,357)     2,398,400   59     1,883,765
                                   
Total Deferred Assets   63,119               89,394                 2,473,304
Total Deferred Liabilities (1,173,559)               (601,731)                 (589,539)
Total Deferred (1,110,440)               (512,337)                 1,883,765

 

(1) The Company taxes exchange differences on a cash basis to calculate income tax and social contribution on net income.
Schedule of estimated recovery of deferred tax assets

The estimated recovery of deferred tax assets of IRPJ and CSLL are presented by net when referring to a single jurisdiction as shown in the table below:

 

In millions of reais   Consolidated
2020   230
2021   713
2022   938
2023   985
2024   431
 Deferred Asset   3,297
 Deferred liabilities  - Parent Company   (823)
 Net Deferred Asset   2,474
 Deferred liabilities - Subsidiaries   (590)
 Net Deferred Asset   1,884
Schedule of income tax and social contribution recognized in shareholders' equity

The income statement and social contribution recognized directly in the shareholder’s equity are demonstrated below:

 

  Consolidated
  12/31/2019   12/31/2018
Income tax and social contribution      
Actuarial gains on defined benefit pension plan 215,306   176,700
Estimated losses for deferred income and social contribution tax credits - actuarial gains (217,969)   (180,048)
Exchange differences on translating foreign operations (325,350)   (325,350)
Cash flow hedge accounting 426,961   490,041
Estimated losses for deferred income and social contribution tax credits - cash flow hedge (426,961)   (490,041)
  (328,013)   (328,698)
Schedule of deferred tax assets on tax losses and temporary differences

The deferred tax assets on tax losses and temporary differences refers mainly to the following:

 

  Nature Description
  Tax losses The Company incur tax losses at the parent company level, because of financial expenses over its leverage, since it holds substantially all loans and financings of CSN group. In 2018  the parent company presented taxable income.
Temporary differences Foreign exchange differences The Company usually opts for the taxation of exchange differences on a cash basis. As a result, taxes are due and expenses are deductible when the underlying asset or liabilities is settled.
Losses on Usiminas shares Changes in investments in Usiminas’ shares are recognized on an accrual basis, but the event that generates taxation or deductibility will only occur at the time of divestment.
Other provisions Other provisions are recognized on an accrual basis, but their taxation occurs only at the time of their realization. This includes provisions for contingencies, impairment losses, environmental liabilities, etc.