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Income Taxes

12 Months Ended

Dec. 31, 2020

10. Income Taxes

The Company’s U.S. and foreign source income/(loss) were:


	Years Ended December 31,
	2020		2019
U.S.	$	1,879	$	(1,730)
Canada		(308)		(3,514)
Other foreign, net		(1,151)		(4,142)
	$	420	$	(9,386)

During the years ended December 31, 2020 and 2019, the Company recognized $nil current and deferred income tax expense or benefit in each of the U.S., Canada, and other foreign jurisdictions, due to full valuation allowances within each jurisdiction.

Rate Reconciliation

Reconciliations between the Company’s combined income taxes at statutory rates and the U.S. effective income tax (benefit)/expense were:


	Years Ended December 31,
	2020		2019
Income taxed at statutory rates	$	36	$	(2,250)
Increase (decrease) in taxes from:
State Tax		66		(61)
Stock-based compensation		50		84
Imputed interest		9		20
Other adjustments		(1)		82
Mining concessions disposition		853		—
Inflation adjustment		(254)		—
Prior year provision to actual adjustments		885		475
Change in US tax rate		29		—
Change in foreign tax rate		100		(1,361)
Differences in tax rates		(52)		(284)
Effect of foreign exchange		(1,236)		66
Change in valuation allowance		(485)		3,229
Income tax (benefit)/expense	$	—	$	—

Deferred Taxes

Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Components of the Company’s deferred tax assets and liabilities were:


	December 31,
	2020		2019
Deferred income tax assets
Excess tax basis over book basis of property, plant and equipment	$	7,776	$	8,295
Marketable securities		—		500
Operating loss carryforwards		36,965		36,716
Capital loss carryforwards		13,778		13,618
Capital expenditures		374		374
Stock compensation		164		235
VAT recoverable		150		158
Unrealized foreign exchange gain/loss		117		125
Environmental liability		65		65
Offering costs		46		104
Accrued vacation		22		24
Other		5		—
Total future tax assets		59,462		60,214
Valuation allowance for future tax assets		(59,401)		(59,886)
		61		328
Deferred income tax liabilities
Other investments		61		328
		61		328

Total Deferred Taxes	$	—	$	—

Valuation Allowance on Canadian and Foreign Tax Assets

We establish a valuation allowance against future income tax assets if, based on available information, it is more likely than not that all of the assets will not be realized. The valuation allowance of $59,401 and $59,886 at December 31, 2020 and 2019, respectively, related mainly to net operating and capital loss carryforwards where the utilization of such attributes is not more likely than not. The Company continually assesses both positive and negative evidence to determine whether it is more likely than not that deferred tax assets can be realized prior to their expiration.

Loss Carryforwards

The Company’s tax loss carryforwards expire as follows:


	Noncapital Canada		U.S.		Mexico		Barbados		Total
2020	$	—	$	—	$	—	$	22	$	22
2021		—		—		—		4		4
2022		—		—		1,653		6		1,659
2023		—		—		385		6		391
2024		—		—		—		6		6
2025		—		—		83		6		89
2026		1,027		—		847		5		1,879
2027		847		—		—		7		854
2028		5,245		—		—		—		5,245
2029		4,022		—		—		—		4,022
2030		5,032		1,761		—		—		6,793
2031		3,806		3,407		—		—		7,213
2032		6,397		2,323		—		—		8,720
2033		6,185		3,098		—		—		9,283
2034		4,420		—		—		—		4,420
2035		3,729		2		—		—		3,731
2036		2,799		2,655		—		—		5,454
2037		1,916		2,482		—		—		4,398
2038		2,666		—		—		—		2,666
2039		3,338		—		—		—		3,338
2040		635		—		—		—		635
	$	52,064	$	15,728	$	2,968	$	62	$	70,822

U.S. loss carryforwards for tax years beginning in 2018 of $2,123, Canadian capital loss carryforwards of $102,057 and Australian NOLs of $58,848, which do not expire, are not included in the previous table.

Accounting for uncertainty in taxes

Accounting Standards Codification Topic 740 guidance requires that the Company evaluate all income tax positions taken, and recognize a liability for any uncertain tax positions that are not more likely than not to be sustained. As of December 31, 2020, the Company believes it had no liability for unrecognized tax positions. If the Company were to determine that a tax position was not more likely than not to be sustained, the Company would recognize the liability and, if applicable, related interest and penalties within income tax expense.

Tax statute of limitations

The Company files income tax returns in Canada, U.S. federal and state jurisdictions and other foreign jurisdictions. There are currently no tax examinations underway for these jurisdictions. Furthermore, the Company is no longer subject to Canadian tax examinations by the Canadian Revenue Agency for years ended on or before December 31, 2017 or U.S. federal income tax examinations by the Internal Revenue Service for years ended on or before December 31, 2017. Some U.S. state and other foreign jurisdictions are still subject to tax examination for years ended on or before December 31, 2016.

Although certain tax years are closed under the statute of limitations, tax authorities can still adjust losses being carried forward into open years.

Coronavirus Aid, Relief, and Economic Security Act

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted in response to the COVID-19 pandemic. The CARES Act, among other things, temporarily permits loss carryovers and carrybacks to offset 100% of taxable income for taxable years beginning after 2017 but before 2021. Under previous legislation, loss

carryovers were limited to 80% of taxable income. For the year ended December 31, 2020, the Company reduced estimated taxable income of $5,042 to $nil by applying loss carryforwards to 100% of estimated taxable income.

Other key provisions of the CARES Act allow tax losses incurred in 2018 through 2020 to be carried back to each of the five preceding taxable years to generate refunds of previously paid income taxes and provide for eligible employers to receive loans under the Paycheck Protection Program (“PPP”). The Company is currently evaluating the impact of these and other provisions of the CARES Act. We do not expect the CARES Act to result in a material cash benefit to the Company and Vista has not received a PPP loan.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

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