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Deferred Income Tax Assets and Liabilities

12 Months Ended

Dec. 31, 2021

Disclosure of deferred taxes [text block] [Abstract]

Deferred income tax assets and liabilities

17.

Deferred income tax assets and liabilities

The following is the composition of the caption according to the items that originated it:

	As of January 1, 2020			Effect on profit or loss			Effect on OCI		Additions Leases			Additions to quarry rehabilitation provision			As of December 31, 2020			Effect on profit or loss			Effect on OCI			As of December 31, 2021
	S/(000)			S/(000)			S/(000)		S/(000)			S/(000)			S/(000)			S/(000)			S/(000)			S/(000)
Movement of deferred income tax assets:
Deferred income tax assets
Provision of discounts and bonuses to customers		2,032			425			-		-			-			2,457			(230	)		-			2,227
Provision for vacations		1,729			(159	)		-		-			-			1,570			335			-			1,905
Effect of tax-loss carry forward		2,614			6,656			-		-			-			9,270			(7,559	)		-			1,711
Allowance for expected credit losses for trade receivables		832			625			-		-			-			1,457			76			-			1,533
Allowance for expected credit losses for other receivables		974			-			-		-			-			974			-			-			974
Lease liabilities		14			(131	)		-		1,009			-			892			(87	)		14			819
Legal claim contingency		-			461			-		-			-			461			-			-			461
Estimate for devaluation of spare parts and supplies		-			431			-		-			-			431			1			-			432
Effect of differences between book and tax bases of fixed assets and in the depreciation rates used for book purposes		198			29			-		-			-			227			73			-			300
Effect of differences between book and tax bases of inventories		922			(867	)		-		-			-			55			-			-			55
Other		375			(312	)		-		-			-			63			555			(14	)		604
		9,690			7,158			-		1,009			-			17,857			(6,836	)		-			11,021
Deferred income tax liabilities
Effect of differences between book and tax bases of fixed assets and in the depreciation rates used for book purposes		(2,259	)		829			-		-			-			(1,430	)		486			-			(944	)
Right of use assets		(17	)		217			-		(1,009	)		-			(809	)		178			(17	)		(648	)
Other		5			(5	)		-		-			-			-			-			17			17
		(2,271	)		1,041			-		(1,009	)		-			(2,239	)		664			-			(1,575	)
Total deferred income tax assets		7,419			8,199			-		-			-			15,618			(6,172	)		-			9,446
Movement of deferred income tax liabilities:
Deferred income tax assets
Impairment on brine project assets Salmueras		17,087			476			-		-			-			17,563			255			-			17,818
Impairment of mining assets		7,123			(207	)		-		-			-			6,916			(212	)		-			6,704
Long-term incentive plan		2,511			1,055			-		-			-			3,566			3,075			-			6,641
Financial instruments designated at fair value through OCI		879			-			5,172		-			-			6,051			-			589			6,640
Provision for spare parts and supplies obsolescence		4,963			418			-		-			-			5,381			327			-			5,708
Provision for vacations		3,071			187			-		-			-			3,258			423			-			3,681
Quarry rehabilitation provision		539			(52	)		-		-			2,294			2,781			(55	)		-			2,726
Legal claim contingency		-			(140	)		-		1,205			-			1,065			(135	)		-			930
Allowance for expected credit losses for trade receivables		101			-			-		-			-			101			534			-			635
Lease liabilities		-			450			-		-			-			450			-			-			450
Other		349			(74	)		-		-			-			275			53			-			328
		36,623			2,113			5,172		1,205			2,294			47,407			4,265			589			52,261
Deferred income tax liabilities
Effect of differences between book and tax bases of fixed assets and in the depreciation rates		(177,448	)		(12,802	)		-		-			(2,294	)		(192,544	)		2,366			-			(190,178	)
Net gain on cash flow hedge		(3,219	)		(220	)		487		-			-			(2,952	)		1,684			(6,146	)		(7,414	)
Effect of costs of issuance of senior notes		(1,010	)		240			-		-			-			(770	)		(1,915	)		-			(2,685	)
Right of use assets		-			242			-		(1,205	)		-			(963	)		217			-			(746	)
Other		(45	)		3			-		-			-			(42	)		-			-			(42	)
		(181,722	)		(12,537	)		487		(1,205	)		(2,294	)		(197,271	)		2,352			(6,146	)		(201,065	)
Total deferred income tax liabilities, net		(145,099	)		(10,424	)		5,659		-			-			(149,864	)		6,617			(5,557	)		(148,804	)
					(2,225	)		5,659											445			(5,557	)

The Group offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities, and the tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority.

A reconciliation between tax expenses and the product of the accounting profit multiplied by Peruvian tax rate for the years 2021, 2020 and 2019 is as follows:

	2021			2020			2019
	S/(000)			S/(000)			S/(000)

Accounting profit before income tax		224,110			85,898			194,353
At statutory income tax rate of 29.5%		(66,112	)		(25,340	)		(57,334	)

Permanent differences
Non-deductible expenses, net		(4,070	)		(1,596	)		(4,181	)
Effect of tax-loss carry forward non-recognized		(758	)		(1,068	)		(791	)
At the effective income tax rate of 32% in 2021 (2020: 33% and 2019: 32%)		(70,940	)		(28,004	)		(62,306	)

The income tax expenses shown for the years ended December 31, 2021, 2020 and 2019 are:

	2021			2020			2019
	S/(000)			S/(000)			S/(000)

Consolidated statement of profit or loss
Current		(71,385	)		(25,779	)		(41,709	)
Deferred		445			(2,225	)		(20,597	)
		(70,940	)		(28,004	)		(62,306	)

The income tax recorded directly to other comprehensive income represents a loss of S/5,557,000 during the year 2021, a gain of S/5,659,000 and S/3,308,000 during the years 2020 and 2019, respectively.

The composition of the deferred income tax related to the items recognized in the consolidated statement of other comprehensive income and equity during the year, as follow:

	2021			2020		2019
	S/(000)			S/(000)		S/(000)

Tax effect on unrealized gain on available-for-sale financial asset		589			5,172		2,554
Tax effect on unrealized gain (loss) on hedging derivative financial asset		(6,146	)		487		754
Total deferred income tax in OCI		(5,557	)		5,659		3,308

As of December 31, 2021, 2020 and 2019, it is not necessary to recognize deferred tax liability for taxes that would be payable on the unremitted earnings of the Group’s subsidiaries. The Group has determined that the timing differences will be reversed by means of dividends to be received in the future that, according to the tax rules in effect in Peru, are not subject to income tax.

As of December 31, 2021, certain subsidiaries of the Group have tax loss carryforwards of S/24,085,000 (2020: S/22,230,000). These tax loss carryforwards do not expire, are related to subsidiaries that have a history of losses for some time and cannot be used to offset future taxable profits of other Group subsidiaries. No deferred assets have been recognized in relation to these tax loss carryforwards, since there are no possibilities of tax planning opportunities or other evidence of recovery in the near future.

For information purposes, the temporary difference associated with investments in subsidiaries, would generate an aggregate deferred tax liability amounting to S/83,079,000 (2020: S/80,357,000), which should not be recognized in the consolidated financial statements as it is not expected to reverse in the foreseeable future and the Company is in control of such reversal.