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18.INCOME TAX AND SOCIAL CONTRIBUTIONS (Tables)
 12 Months Ended
Dec. 31, 2020
Income Tax And Social Contributions  
Schedule of income tax and social contribution income (expense)

The income tax and social contribution recognized in net income for the year are as follows:

 

          Consolidated
  12/31/2020   12/31/2019   12/31/2018
Income tax and social contribution income (expense)    
Current            (2,052,204)              (1,564,622)                 (827,229)
Deferred              1,426,696                2,398,400                   576,895
                (625,508)                   833,778                 (250,334)
Schedule of reconciliation of income tax and social contribution income (expense)

The reconciliation of income and social contribution expenses and income of the consolidated and the product of the current tax rate on income before income tax and social contribution are shown below:

 

          Consolidated
  12/31/2020   12/31/2019   12/31/2018
Income before income tax and social contribution  4,918,126    1,410,733    5,450,917
Tax rate 34%   34%   34%
Income tax and social contribution at combined statutory rate   (1,672,163)     (479,649)     (1,853,312)
Adjustment to reflect the effective rate:          
Equity in results of affiliated companies 28,391   46,737   50,134
Profit with differentiated rates or untaxed   (519,840)     (236,404)    (46,006)
Transfer price adjustment  (15,645)    (18,494)    (74,836)
Tax loss carryforwards without recognizing deferred taxes  (27,758)    (21,095)    (27,683)
Indebtdness limit  (25,087)    (20,393)    (38,486)
Unrecorded deferred taxes on temporary differences   5,142   (2,835)    (11,964)
Reversal for deferred income tax and social contribution credit  1,540,087    1,530,185    1,807,909
Income taxes and social contribution on foreign profit  (13,011)    (14,424)    (30,219)
Tax incentives 64,818   39,042   36,710
Deferred taxes on exchange variation in equity          (43,667)
Interest on equity 17,177   22,107    
Other permanent deductions (additions) (7,619)    (10,999)    (18,914)
Income tax and social contribution in net income for the year   (625,508)    833,778     (250,334)
Effective tax rate 13%   -59%   79%
Schedule of deferred income tax and social contribution

Deferred income tax and social contribution balances are as follows:

 

                                  Consolidated
  12/31/2018   Movement           12/31/2019   Movement           12/31/2020
      Shareholders'
Equity		   P&L   Others       Shareholders'
Equity		   P&L   Others    
                                   
Deferred                                  
Income tax losses   959,240         651,561          1,610,801          238,198        1,848,999
Social contribution tax losses   367,358         242,688          610,046         78,162        688,208
Temporary differences (1,838,935)   (2,357)     1,504,151   59   (337,082)   (59,380)     1,110,336   5,029    718,903
- Provision for tax. social security, labor, civil and environmental risks   334,380         (70,367)         264,013         15,136        279,149
- Asset impairment losses   181,516       915         182,431          (26,444)   5,029    161,016
- (Gains)/losses on financial instruments   359,776        54,719         414,495        (409,468)         5,027
- Actuarial liability (pension and healthcare plan)   276,032   38,569             314,601   (44,732)    (7,412)        262,457
- Accrued supplies and services  95,644        36,767         132,411         22,041        154,452
- Unrealized exchange variation (1)   1,010,532         170,969         1,181,501          (29,175)        1,152,326
- Gain upon loss of control in Transnordestina   (92,180)                 (92,180)                 (92,180)
- Cash flow hedge accounting   490,041    (63,080)             426,961   1,315,839            1,742,800
- Acquisition at fair value of SWT and CBL (172,114)    (52,071)    39,672       (184,513)   (57,651)    30,149         (212,015)
- Deferred taxes not computed (252,940)         (39,021)       (291,961)          (25,966)         (317,927)
- (Losses) estimated /reversals to deferred taxes credits (3,086,572)   25,159     1,435,415       (1,625,998)    (1,270,110)     1,548,640         (1,347,468)
- Business Combination (1,030,812)       7,471       (1,023,341)        8,292         (1,015,049)
- Consolidation of CBSI         (12)   62     50                 50
- Others  47,762   49,066   (132,377)   (3)     (35,552)     (2,726)     (15,457)        (53,735)
Total (512,337)   (2,357)     2,398,400   59     1,883,765   (59,380)     1,426,696   5,029    3,256,110
                                   
Total Deferred Assets  89,394                 2,473,304                3,874,946
Total Deferred Liabilities (601,731)               (589,539)                 (618,836)
Total Deferred (512,337)                 1,883,765                3,256,110

 

(1) The Company taxes exchange variations 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 netted when referring to a single jurisdiction as shown in the table below:

 

In millions of reais   Consolidated
2021   1,018
2022   1,315
2023   1,257
2024   495
2025   618
Deferred asset   4,703
Deferred liabilities - Parent Company    (828)
Net deferred asset   3,875
Deferred liabilities - subsidiaries    (619)
Net deferred asset   3,256
Schedule of income tax and social contribution recognized in shareholders' equity

Income tax and social contribution recognized directly in equity are shown below:

 

      Consolidated
  12/31/2020   12/31/2019
Income tax and social contribution      
Actuarial gains on defined benefit pension plan   170,604    215,306
Estimated losses for deferred income and social contribution tax credits - actuarial gains (172,520)   (217,969)
Exchange differences on translating foreign operations  (325,350)   (325,350)
Cash flow hedge accounting   1,742,765    426,961
Estimated losses for deferred income and social contribution tax credits - cash flow hedge (1,742,520)   (426,961)
  (327,021)   (328,013)
Schedule of deferred tax assets on tax losses and temporary differences

Deferred income tax / social contribution on tax losses and temporary differences refers mainly to the following items:

 

  Nature Brief description
 

Tax losses

 

 The Company incurs tax losses in the Parent Company as a result of financial expenses on its indebtedness, since it substantially holds all the loans and financing of the CSN Group. However, the Parent Company reported taxable income in two quarters of 2020.
  Exchange variation expenses Since 2012, the Company has opted for taxing exchange rate variations on a cash basis. As a result, taxes are due and expenses are deductible when the underlying asset or liability is settled.

Differences

Temporary 

 Loss on investment in Usiminas shares Changes in investment in Usiminas shares are recognized on an accrual basis; however, the event that generates taxation or deductibility will only occur when the investment is sold.
 

Other provisions

 

 Other provisions are recognized on an accrual basis and their taxation occurs only at the time of their realization, such as: provision for contingencies, loss for impairment, provision for environmental liabilities, etc.