XML 40 R26.htm IDEA: XBRL DOCUMENT
v3.23.1

Income tax | 12 Months Ended
--- | ---
Dec. 31, 2022
Income tax |
Income tax | 20. Income tax a) In accordance with the MITL, the Company and its Mexican subsidiaries are subject to income tax and each files its tax returns on an individual entity basis and the related tax results are included in the accompanying consolidated financial statements. The income tax is computed taking into consideration the taxable and deductible effects of inflation, such as depreciation calculated on Adjusted assets values. Taxable income is increased or reduced by the effects of inflation on certain monetary assets and liabilities through the annual inflation adjustment.
(i) | Based on the approved law, corporate income tax current rate for 2022, 2021 and 2020 and thereafter is 30%.
(ii) | The tax rules include limits in the deductions of the exempt compensation amount certain items, as follows: Wages and benefits paid to workers 47% of income paid to workers and in certain cases up to 53% (holiday bonus, savings fund, employee profit sharing, seniority premiums) will be deductible for employers. As a result, certain wage and salary provisions have difference between tax and book values at year-end.
(iii) | The MITL sets forth criteria and limits for applying some deductions, such as: the deduction of payments which, in turn, are exempt income for workers, contributions for creating or increasing provisions for pension funds, contributions to the Mexican Institute of Social Security payable by the worker that are paid by the employer, as well as the possible non-deduction of payments made to related parties in the event of failing to meet certain requirements.
(iv) | Taxable income for purposes of the employee profit sharing is the same used for the Corporate Income Tax except for certain items.
(v) | A 10% withholding tax is imposed on dividends distributions to individuals and foreign shareholders from earnings generated starting January 1, 2014.
The income tax rates for 2022, 2021 and 2020 were in Guatemala 25%, Costa Rica 30% and El Salvador 30%. b) For the years ended December 31, 2022, 2021 and 2020, the Company reported on a combined basis taxable income of US$53,293, US$59,472 and US$15,140, respectively, which was partially offset by tax losses from prior years. In accordance with the MITL and Costa Rican Income Tax Law (CRITL), tax losses may be carried forward against taxable income generated in the succeeding ten and three years, respectively. Carryforward tax losses are adjusted based on inflation. In accordance with Guatemala Income Tax Law (GITL) and El Salvador Income Tax Law (ESITL), tax losses cannot be carried forward against taxable income generated. c) An analysis of consolidated income tax expense for the years ended December 31, 2022, 2021 and 2020 is as follows: Consolidated statements of operations
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | 2022 |  | 2021 |  | 2020 |
Current year income tax expense | ​ | US$ | (15,456) | ​ | US$ | (17,903) | ​ | US$ | (3,978) | ​
Deferred income tax (expense) benefit | ​ |  | 67,595 | ​ |  | (12,670) | (1) |  | 65,709 | (2)
Total income tax benefit (expense) | ​ | US$ | 52,139 | ​ | US$ | (30,573) | ​ | US$ | 61,731 | ​
​ (1) Includes translation effect by US$ (118) (2) Includes translation effect by US$ 90 ​ Consolidated statements of comprehensive income ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | 2022 |  | 2021 |  | 2020
Deferred income tax related to items recognized in OCI during the year |  | ​ |  |  | ​ |  |  | ​ |
Net (loss) gain cash flow hedges | ​ | US$ | (80) | ​ | US$ | (274) | ​ | US$ | 2,347
Remeasurement (loss) gain of employee benefits | ​ |  | (79) | ​ |  | 138 | ​ |  | 39
Deferred income tax recognized in OCI | ​ | US$ | (159) | ​ | US$ | (136) | ​ | US$ | 2,386
​ d) A reconciliation of the statutory corporate income tax rate to the Company’s effective tax rate for financial reporting purposes is as follows: The Company’s effective income tax reconciliation using domestic tax rate ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | 2022 |  | % |  | 2021 |  | % |  | 2020 |  | % |
Statutory income tax rate |  | (39,709) | ​ | 30.00 | % | 41,108 | ​ | 30.00 | % | (76,036) | ​ | 30.00 | %
Amendment tax return effects and other tax adjustments |  | 1,242 | ​ | (0.94) | % | (29) | ​ | (0.02) | % | (3,563) | ​ | 1.41 | %
Inflation on furniture, intangible and equipment |  | (309) | ​ | 0.23 | % | (2,323) | ​ | (1.70) | % | (873) | ​ | 0.34 | %
Inflation of tax losses | ​ | (4,335) | ​ | 3.28 | % | (1,971) | ​ | (1.44) | % | (676) | ​ | 0.27 | %
Foreign countries difference with Mexican statutory rate | ​ | (9) | ​ | 0.00 | % | 124 | ​ | 0.10 | % | 175 | ​ | (0.07) | %
Annual inflation adjustment |  | (11,200) | ​ | 8.46 | % | (7,971) | ​ | (5.82) | % | 2,591 | ​ | (1.02) | %
Recorded deferred taxes on tax losses | ​ | 7 | ​ | 0.00 | % | (434) | ​ | (0.32) | % | 3,733 | ​ | (1.47) | %
Non-deductible expenses | ​ | 7,695 | ​ | (5.81) | % | 2,069 | ​ | 1.51 | % | 12,918 | ​ | (5.10) | %
Difference in Foreign Exchange income (loss) for tax purposes | ​ | (5,521) | ​ | 4.17 | % | — | ​ | — | ​ | — | ​ | — | ​
​ |  | (52,139) | ​ | 39.39 | % | 30,573 | ​ | 22.31 | % | (61,731) | ​ | 24.36 | %
​ Mexican income tax matters For Mexican purposes, corporate income tax is computed on accrued basis. MITL requires taxable profit to be determined by considering revenue net of tax deductions. Prior years’ tax losses can be utilized to offset current year taxable income. Income tax is determined by applying the 30% rate on the net amount after tax losses utilization. For tax purposes, income is considered taxable at the earlier of: (i) the time the revenue is collected, (ii) the service is provided or (iii) the time of the issuance of the invoice. Expenses are deductible for tax purposes generally on accrual basis, with some exceptions, once the requirements established in the tax law are fulfilled. Central America (Guatemala, Costa Rica and El Salvador) According to Guatemala Corporate Income tax law, under the regime on profits from business activities, net operating losses cannot offset taxable income in prior or future years. For the years ended December 31, 2022, 2021 and 2020, our subsidiary in Guatemala generated tax losses of US$10, US$32 and US$91, respectively. According to Costa Rica Corporate Income tax law, under the regime on profits from business activities, tax losses can offset taxable income in a term of three years. For the year ended December 31, 2022, our subsidiary in Costa Rica generated net operating gain for an amount of US$3,869. For the years ended December 31, 2021 and 2020, our subsidiary in Costa Rica generated net operating losses for an amount of US$5,947 and US$2,794, respectively, for which no deferred tax asset has been recognized. According to El Salvador Corporate Income tax law, under the regime on profits from business activities, net operating losses cannot offset taxable income in prior or future years. For the year ended December 31, 2022, our subsidiary in El Salvador generated net operating gain for an amount of US$17,078. For the years ended December 31, 2021 and 2020, our subsidiary in El Salvador generated net operating losses for an amount of US$2,601 and US$833, respectively. e) An analysis of consolidated deferred taxes is as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | 2022 | ​ | 2021
​ | ​ | Consolidated | ​ | Consolidated | ​ | Consolidated | ​ | Consolidated
​ | ​ | statement of | ​ | statement of | ​ | statement of | ​ | statement of
​ |  | financial position |  | operations |  | financial position |  | operations
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Deferred income tax assets: |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
Lease liability | ​ | US$ | 755,855 | ​ | US$ | 122,856 | ​ | US$ | 633,033 | ​ | US$ | (7,745)
Unearned transportation revenue | ​ |  | 58,010 | ​ |  | 48,176 | ​ |  | 9,885 | ​ | ​ | (53,134)
Aircraft and engine lease return obligation | ​ |  | 77,007 | ​ |  | 23,951 | ​ |  | 53,056 | ​ |  | 15,448
Tax losses available for offsetting against future taxable income | ​ |  | 38,387 | ​ |  | 33,122 | ​ |  | 4,865 | ​ |  | (24,499)
Intangible | ​ | ​ | 29,687 | ​ | ​ | (364) | ​ | ​ | 30,052 | ​ | ​ | 10,430
Allowance for doubtful accounts | ​ |  | 4,854 | ​ |  | (1,510) | ​ |  | 6,356 | ​ |  | 3,599
Employee benefits | ​ |  | 2,486 | ​ |  | 2,104 | ​ |  | 294 | ​ |  | (391)
Employee profit sharing | ​ |  | 134 | ​ |  | (3,672) | ​ |  | 3,805 | ​ |  | 4,076
Non derivative financial instruments | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 24,360
​ | ​ |  | 966,420 | ​ |  | 224,663 | ​ |  | 741,346 | ​ |  | (27,856)
Deferred income tax liabilities: | ​ |  | ​ | ​ |  |  | ​ |  |  | ​ |  |
Right of use asset | ​ | ​ | 571,521 | ​ | ​ | 106,233 | ​ | ​ | 465,382 | ​ | ​ | (57,188)
Supplemental rent | ​ |  | 55,479 | ​ |  | (7,872) | ​ |  | 63,351 | ​ |  | (29,592)
Rotable spare parts, furniture and equipment, net | ​ |  | 120,561 | ​ |  | 54,960 | ​ |  | 65,618 | ​ |  | 29,015
Provisions | ​ | ​ | 7,345 | ​ | ​ | 4,200 | ​ | ​ | 2,430 | ​ | ​ | 12,789
Inventories | ​ |  | 4,594 | ​ |  | 338 | ​ |  | 4,256 | ​ |  | 215
Other prepayments | ​ |  | 376 | ​ |  | (1,034) | ​ |  | 1,431 | ​ |  | 675
Derivative Financial instruments | ​ | ​ | 33 | ​ | ​ | — | ​ | ​ | 113 | ​ | ​ | —
Prepaid expenses and other assets | ​ | ​ | 8,963 | ​ | ​ | 243 | ​ | ​ | 8,684 | ​ | ​ | 29,017
​ | ​ |  | 768,872 | ​ |  | 157,068 | ​ |  | 611,265 | ​ |  | (15,069)
​ | ​ | US$ | 197,548 | ​ | US$ | 67,595 | ​ | US$ | 130,081 | ​ | US$ | (12,787)
​ Reflected in the consolidated statement of financial position as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | 2022 |  | 2021
​ |  | ​ |  |  | ​ |
Deferred tax assets | ​ | US$ | 208,010 | ​ | US$ | 141,272
Deferred tax liabilities | ​ |  | (10,462) | ​ |  | (11,191)
Deferred tax assets, net | ​ | US$ | 197,548 | ​ | US$ | 130,081
​ A reconciliation of deferred tax asset, net is as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | 2022 |  | 2021
Opening balance as of January 1, | ​ | US$ | 130,081 | ​ | US$ | 146,816
Deferred income tax benefit (expense) during the current year recorded on profits* | ​ |  | 67,595 | ​ |  | (12,787)
Deferred income tax expense during the current year recorded in accumulated other comprehensive loss | ​ |  | (159) | ​ |  | (136)
Conversion effects | ​ | ​ | 31 | ​ | ​ | (3,812)
Closing balance as of December 31, | ​ | US$ | 197,548 | ​ | US$ | 130,081
​ * In 2021 includes the tax effect of the discontinuation of the hedging reserve by US$24 million. ​ According to IAS 12, Income Taxes, a deferred tax asset should be recognized for the carry-forward of available tax losses to the extent that it is probable that future taxable income will be available against which the available tax losses can be utilized. In these regards, the Company has recognized as of December 31, 2022 and 2021 a deferred tax asset for tax losses of US$38,387 and US$4,865, respectively. An analysis of the available tax losses carry-forward of the Company at December 31, 2022 is as follows:
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Year |  | Historical |  | Inflation adjusted |  | ​ | ​ |  | Total remaining |  | Year of
of loss |  | Loss |  | tax loss |  | Utilized |  | amount |  | expiration
2019 | ​ | US$ | 239 | ​ | US$ | 304 | ​ | US$ | 166 | ​ | US$ | 138 |  | 2029
2020 | ​ |  | 5,461 | ​ |  | 5,461 | ​ |  | 2,126 | ​ |  | 3,335 |  | 2023
2020 | ​ |  | 2,745 | ​ |  | 3,427 | ​ |  | 103 | ​ |  | 3,324 |  | 2030
2021 | ​ | ​ | 6,457 | ​ | ​ | 6,404 | ​ | ​ | — | ​ | ​ | 6,404 |  | 2024
2021 | ​ | ​ | 550 | ​ | ​ | 651 | ​ | ​ | — | ​ | ​ | 651 | ​ | 2031
2022 | ​ | ​ | 110,922 | ​ | ​ | 114,105 | ​ | ​ | — | ​ | ​ | 114,105 | ​ | 2032
​ | ​ | US$ | 126,374 | ​ | US$ | 130,352 | ​ | US$ | 2,395 | ​ | US$ | 127,957 | ​ | ​
​ During the years ended December 31, 2022 and 2021 the Company utilized US$4,035 and US$94,489, respectively of the available tax loss carry-forwards. ​ During the year ended December 31, 2022 the Company recognized US$110,922 of the available tax loss carry-forwards. ​ A breakdown of available tax loss carry-forward of Controladora and its subsidiaries as of December 31, 2022 is as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Historical | ​ | Inflation adjusted | ​ | ​ | ​ | ​ | Total |
​ |  | loss |  | tax loss |  | Utilized |  | remaining amount |
Concesionaria | ​ | US$ | 110,685 | ​ | US$ | 113,861 | ​ | US$ | — | ​ | US$ | 113,861 | ​
Vuela Aviación | ​ |  | 13,476 | ​ |  | 13,423 | ​ |  | 3,684 | ​ |  | 9,739 | ​
Comercializadora | ​ | ​ | 2,628 | ​ | ​ | 3,256 | ​ | ​ | 166 | ​ | ​ | 3,090 | ​
Viajes Vuela | ​ |  | 1,143 | ​ |  | 1,370 | ​ |  | 103 | ​ |  | 1,267 | ​
​ | ​ | US$ | 127,932 | ​ | US$ | 131,910 | ​ | US$ | 3,953 | ​ | US$ | 127,957 | ​
Unrecognized NOLs | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | — | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | US$ | 127,957 | ​
Tax rate | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | 30 | %
Deferred income tax | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | US$ | 38,387 | ​
​ The temporary differences associated with investments in the Company’s subsidiaries, for which a deferred tax liability has not been recognized in the periods presented, aggregate in 2022 was US$ 7,143 ( 2021 US$7,648). The Company has determined that the undistributed profits of its subsidiaries will not be distributed in the foreseeable future. The Company has an agreement with its associate that the profits of the associate will not be distributed until it obtains the consent of the Company. The Company does not anticipate giving such consent at the reporting date. Furthermore, the Group will not distribute its profits until it obtains the consent of all venture partners. e) At December 31, 2022 the Company had the following tax balances: ​
​ | ​ | ​ | ​
​ |  | 2022
Adjusted contributed capital account (Cuenta de capital de aportación or “CUCA”) | ​ | US$ | 489,080
CUFIN* | ​ |  | 226,885
​ * The calculation comprises all the subsidiaries of the Company. ​ As of December 31, 2022, the Company has tax proceedings regarding uncertain tax positions by an amount of about U.S. $31 million, associated to the deductibility of certain Company expenses during 2013 and 2014. The Company has filed legal administrative procedures. Volaris considers that has solid arguments to believe that it will not have adverse effects. Nonetheless, until all stages in the procedures are exhausted in each proceeding, the Company cannot assure the achievement of a final favorable resolution.

X
- Definition The entire disclosure for income taxes. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Name IAS -Number 12 -IssueDate 2022-03-24 -Section Disclosure -URI https://taxonomy.ifrs.org/xifrs-link?type=IAS&num=12&code=ifrs-tx-2022-en-r&doctype=Standard&dita_xref=IAS12_g79-88__IAS12_g79-88_TI -URIDate 2022-03-24 + Details
Name: | ifrs-full_DisclosureOfIncomeTaxExplanatory
Namespace Prefix: | ifrs-full_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | ifrs-full_MajorComponentsOfTaxExpenseIncomeAbstract
Namespace Prefix: | ifrs-full_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration