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INCOME TAX

12 Months Ended

Dec. 31, 2021

4. INCOME TAX

In June 2021, a new tax law was enacted that establishes a new tiered tax rate structure for income tax, establishing three segments based on the level of accumulated net taxable income. The new tax rates are:

-25% of net taxable income up to AR$ 5 million;

-30% of net taxable income up to AR$ 50 million;

-35% of net taxable income that exceeds AR$ 50 million.

This new tax rate scheme is applicable for fiscal years beginning on or after January 1, 2021.

The following is a reconciliation between the income tax charged to income as of December 31, 2021, 2020 and 2019, and that which would result from applying the current tax rate on the accounting profit


	12/31/2021		12/31/2020		12/31/2019
Income before taxes	(1,456,451)		6,298,013		(4,078,880)
Tax rate	28	%	30	%	30	%
Income for the year at tax rate	400,556		(1,889,404)		1,223,664
Permanent differences at tax rate:
Contribution SGR (Mutual Guarantee Societies)	288,750		490,726		—
Tax inflation adjustment	(112,015)		21,798		344,519
Income tax return FY 2019	(26,496)		25,852		—
Effect of tax rate change on deferred tax	(761,691)		860,399		—
Non-deductible results	(69,011)		(523,258)		(1,914,841)
Income tax	(279,907)		(1,013,887)		(346,658)

4.1Deferred tax

The net position of the deferred tax is as follows:


	12/31/2021	12/31/2020
Deferred tax assets	3,234,956	5,005,051
Deferred tax liability	(61,736)	(63,403)
Net assets by deferred tax	3,173,220	4,941,648

Deferred taxes to be recovered in more than 12 months	1,606,518	2,547,060
Deferred taxes to be recovered in 12 months	1,628,438	2,457,991
Subtotal – Deferred tax assets	3,234,956	5,005,051
Deferred taxes to be paid in more than 12 months	(84,871)	(98,324)
Deferred taxes to be paid in 12 months	23,135	34,921
Subtotal – Deferred tax liabilities	(61,736)	(63,403)
Total Net Assets by deferred Tax	3,173,220	4,941,648

According to the analysis carried out by the Group, it is considered that the assets detailed above meet the requirements to consider them recoverable and thus carry out the corresponding recognition.

Deferred tax assets / (liabilities) are summarized as follows:



	Balance at	(Charge)/Credit	Balance at
	12/31/2020	to Income/OCI	12/31/2021
Intangible assets	(1,473,206)	16,650	(1,456,556)
Retirement plans	174,850	(174,850)	—
Loan Loss Reserves	3,287,076	(1,775,050)	1,512,026
Property, plant and equipment	(1,777,375)	(2,211,551)	(3,988,926)
Foreign Currency	(64,721)	12,574	(52,147)
Tax Loss Carry Forward	339,113	(3,605)	335,508
Inflation adjustment credit	3,808,363	(1,837,392)	1,970,971
Provisions	213,099	91,040	304,139
Others	434,449	4,113,756	4,548,205
Total	4,941,648	(1,768,428)	3,173,220



	Balance at	(Charge)/Credit	Balance at
	12/31/2019	to Income	12/31/2020
Intangible assets	(1,442,519)	(30,687)	(1,473,206)
Retirement plans	173,569	1,281	174,850
Loan Loss Reserves	1,892,349	1,394,727	3,287,076
Property, plant and equipment	(1,864,608)	87,233	(1,777,375)
Foreign Currency	(126,352)	61,631	(64,721)
Tax Loss Carry Forward	339,113	—	339,113
Repo transactions	3,067,683	740,680	3,808,363
Provisions	402,898	(189,799)	213,099
Others	(48,341)	482,790	434,449
Total	2,393,792	2,547,856	4,941,648