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Income taxes | 12 Months Ended
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Dec. 31, 2023
Income Tax Disclosure [Abstract] |
Income taxes | Income taxes The Company’s operations are conducted by its foreign subsidiaries in Latin America and the Caribbean. The foreign subsidiaries are incorporated under the laws of their respective countries and as such the Company is taxed in such foreign countries. Statutory tax rates in the countries in which the Company operates for fiscal years 2023, 2022 and 2021 were as follows:
|  | 2023 |  | 2022 |  | 2021
Puerto Rico |  | 18.5% |  | 18.5% |  | 18.5%
Curaçao |  | 22.0% |  | 22.0% |  | 22.0%
USVI |  | 21.0% |  | 21.0% |  | 22.5%
Ecuador, Panama, and Uruguay |  | 25.0% |  | 25.0% |  | 25.0%
Aruba |  | 22.0% |  | 25.0% |  | 25.0%
Chile |  | 27.0% |  | 27.0% |  | 27.0%
Martinique, French Guiana and Guadeloupe |  | 25.0% |  | 25.0% |  | 22.5%
Peru |  | 29.5% |  | 29.5% |  | 29.5%
Costa Rica, Mexico and Trinidad and Tobago |  | 30.0% |  | 30.0% |  | 30.0%
Colombia |  | 35.0% |  | 35.0% |  | 31.0%
Brazil and Venezuela |  | 34.0% |  | 34.0% |  | 34.0%
Argentina |  | 35.0% |  | 35.0% |  | 35.0%
Netherlands |  | 25.8% |  | 25.8% |  | 25.0%
Income tax expense, net for fiscal years 2023, 2022 and 2021 consisted of the following:
|  | 2023 |  | 2022 |  | 2021
Current income tax expense |  | $ | 100,012 |  |  | $ | 100,925 |  |  | $ | 47,999 |
Deferred income tax income |  | (4,310) |  |  | (15,449) |  |  | (16,066) |
Income tax expense, net |  | $ | 95,702 |  |  | $ | 85,476 |  |  | $ | 31,933 |
Income tax expense, net for fiscal years 2023, 2022 and 2021, differed from the amounts computed by applying the Company’s weighted-average statutory income tax rate to pre-tax income (loss) as a result of the following:
|  | 2023 |  | 2022 |  | 2021
Pre-tax income |  | $ | 278,117 |  |  | $ | 226,396 |  |  | $ | 77,786 |
Weighted-average statutory income tax rate (i) |  | 36.1 | % |  | 39.0 | % |  | 41.4 | %
Income tax expense at weighted-average statutory tax rate on pre-tax income |  | 100,411 |  |  | 88,314 |  |  | 32,230 |
Permanent differences: |  |  |  |  |  |
Change in valuation allowance (ii) |  | (254) |  |  | 381 |  |  | (26,865) |
Expiration and changes in tax loss carryforwards |  | 3,784 |  |  | 132 |  |  | 144 |
Venezuela and Argentina remeasurement and inflationary impacts (iii) |  | (16,234) |  |  | (10,009) |  |  | 577 |
Non-deductible expenses |  | 15,548 |  |  | 24,845 |  |  | 21,488 |
Tax benefits and Non-taxable income |  | (12,826) |  |  | (9,740) |  |  | (10,463) |
Income taxes withholdings on intercompany transactions (iv) |  | 9,704 |  |  | 6,374 |  |  | 6,572 |
Differences including exchange rate, inflation adjustment and filing differences |  | (5,586) |  |  | (14,485) |  |  | 1,493 |
Alternative Taxes |  | 2,109 |  |  | 359 |  |  | 1,461 |
Others (v) |  | (954) |  |  | (695) |  |  | 5,296 |
Income tax expense, net |  | $ | 95,702 |  |  | $ | 85,476 |  |  | $ | 31,933 |
(i)Weighted-average statutory income tax rate is calculated based on the aggregated amount of the income before taxes by country multiplied by the prevailing statutory income tax rate, divided by the consolidated income before taxes. (ii)Comprises net changes in valuation allowances for the year, mainly related to net operating losses (“NOLs”). (iii)Comprises changes in valuation allowance during 2023, 2022 and 2021 for $22,825, $57,329 and $(9,723), respectively in Venezuela. (iv)Comprises income tax withheld on the payment of interest on intercompany loans. (v)Mainly comprises income tax effects over intercompany transactions which are eliminated for consolidation purposes. The tax effects of temporary differences and carryforwards that comprise significant portions of deferred tax assets and liabilities as of December 31, 2023 and 2022 are presented below:
|  | 2023 |  | 2022
Tax loss carryforwards (i) |  | $ | 153,823 |  |  | $ | 149,081 |
Purchase price allocation adjustment |  | 12,288 |  |  | 11,298 |
Property and equipment, tax inflation adjustment |  | 53,238 |  |  | 44,785 |
Tax Inflation adjustment |  | (381) |  |  | (2,689) |
Other accrued payroll and other liabilities |  | 41,787 |  |  | 36,055 |
Share-based compensation |  | 3,669 |  |  | 2,340 |
Provision for contingencies, bad debts and obsolescence |  | 23,126 |  |  | 17,949 |
Other deferred tax assets (ii) |  | 27,508 |  |  | 29,157 |
Other deferred tax liabilities |  | (5,403) |  |  | (5,642) |
Leases (iii) |  | 29,216 |  |  | 20,567 |
Property and equipment - difference in depreciation rates |  | (23,200) |  |  | (17,446) |
Valuation allowance (iv) |  | (218,674) |  |  | (201,414) |
Net deferred tax asset |  | $ | 96,997 |  |  | $ | 84,041 |
(i)As of December 31, 2023, the Company and its subsidiaries have accumulated NOLs amounting to $524,023. The Company has NOLs amounting to $192,833, expiring between 2024 and 2028, $122,422, expiring after 2028 and, $208,768 that do not expire. Changes in tax loss carryforwards for the year relate to generation of NOLs. (ii)Other deferred tax assets reflect the net tax effects of temporary differences between the carrying amounts of assets for financial reporting purposes (accounting base) and the amounts used for income tax purposes (tax base). As of December 31, 2023 and 2022, this item includes: provision for regular expenses for $13,070 and $8,856, respectively, in Brazil, Colombia, Mexico, Panama and Venezuela. (iii)As of December 31, 2023 and 2022, this item includes difference in depreciation of net leases (related to differences between ASC842 and local tax regulation) in Brazil; assets of $240,299 and $210,181 and liabilities of $211,083 and $189,614, respectively. (iv)In assessing the realization of deferred income tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized. The total amount of $96,997 for the year ended December 31, 2023, is presented in the consolidated balance sheet as non-current asset and non-current liability amounting to $98,163 and $1,166, respectively. The total amount of $84,041 for the year ended December 31, 2022, is presented in the consolidated balance sheet as non-current asset and non-current liability amounting to $87,972 and $3,931, respectively. Deferred income taxes have not been recorded for temporary differences related to investments in certain foreign subsidiaries. These temporary differences, comprise undistributed earnings considered permanently invested in subsidiaries amounted to $343,520 as of December 31, 2023. Determination of the deferred income tax liability on these unremitted earnings is not practicable because such liability, if any, is dependent on circumstances existing if and when remittance occurs. As of December 31, 2023, and 2022, the Company has not identified unrecognized tax benefits that would favorably affect the effective tax rate if resolved in the Company’s favor. The Company account for uncertain tax positions by determining the minimum recognition threshold that a tax position is required to meet before being recognized in the financial statements. This determination requires the use of significant judgment in evaluating the tax positions and assessing the timing and amounts of deductible and taxable items. The Company is regularly under audit in multiple tax jurisdictions and is currently under examination in several jurisdictions. The Company is generally no longer subject to income tax examinations by tax authorities for years prior to 2017. As of December 31, 2023, there are certain matters related to the interpretation of income tax laws which could be challenged by tax authorities in an amount of $250 million, related to assessments for the fiscal years 2009 to 2017. No formal claim has been made for fiscal years within the statute of limitation by Tax authorities in any of the mentioned matters, however those years are still subject to audit and claims may be asserted in the future. It is reasonably possible that, as a result of audit progression within the next 12 months, there may be new information that causes the Company to reassess the tax positions because the outcome of tax audits cannot be predicted with certainty. While the Company cannot estimate the impact that new information may have on their unrecognized tax benefit balance, it believes that the liabilities recorded are appropriate and adequate as determined under ASC 740.

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