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DEFERRED INCOME TAXES (Tables)
 12 Months Ended
Dec. 31, 2021
Schedule of deferred income and social contribution taxes

 

Schedule of deferred income and social contribution taxes

  12.31.21   12.31.20
Assets      
Tax losses carryforward        2,822,754          2,060,846
Negative calculation basis (social contribution)        1,046,574            772,283
       
Temporary differences - Assets      
Provisions for tax, civil and labor risks          458,229            458,019
Expected credit losses          184,643            194,977
Impairment on tax credits            64,297              67,900
Provision for other obligations          150,609            115,959
Employees' profit sharing            47,227              86,752
Write-down to net realizable value of inventories            27,934              19,189
Employees' benefits plan          148,990            216,510
Lease basis difference            95,563              86,308
Unrealized losses on derivatives, net            21,310                       -
Other temporary differences            42,566              41,899
         5,110,696          4,120,642
       
Temporary differences - Liabilities      
Goodwill amortization basis difference         (307,442)           (320,729)
Depreciation (useful life) basis difference         (895,407)           (851,436)
Business combination (1)         (920,214)           (761,429)
Unrealized gains on derivatives, net                     -             (42,493)
Unrealized fair value gains, net           (37,692)             (39,269)
Other temporary differences           (32,381)             (22,749)
       (2,193,136)        (2,038,105)
       
Total deferred taxes        2,917,560          2,082,537
       
Total Assets        2,941,270          2,109,064
Total Liabilities           (23,710)             (26,527)
         2,917,560          2,082,537
(1)The deferred tax liability on business combination is substantially represented by the allocation of goodwill to property, plant and equipment, brands and contingent liabilities.
Schedule of rollforward deferred tax

The roll-forward of deferred income taxes, net, is set forth below:

Schedule of rollforward deferred tax

  12.31.21   12.31.20
Beginning balance      2,082,537      1,760,552
Deferred income taxes recognized in income from continuing operations         807,744        242,271
Deferred income taxes recognized in other comprehensive income            8,738          32,070
Deferred income taxes recognized in loss from discontinued operations          28,018                   -
Other (1)           (9,477)          47,644
Ending balance      2,917,560      2,082,537
(1)Related to the foreign exchange variation effect on the balances in foreign companies.
The recoverability study is reviewed by the Fiscal Council and approved by the Board of Directors. Based on this estimate, Management believes that it is probable that these deferred tax credits will be realized, as presented below:

In estimating the realization of deferred tax credits on tax losses carryforward, Management considers its budget and strategic plans, which were approved by the Board of Directors, adjusted for changes in economic assumptions and based on the estimates of the main tax additions and exclusions. The recoverability study is reviewed by the Fiscal Council and approved by the Board of Directors. Based on this estimate, Management believes that it is probable that these deferred tax credits will be realized, as presented below:

2022            50,574
2023          309,537
2024          299,366
2025          359,969
2026          400,725
2027 to 2029        1,364,017
2030 and 2031        1,085,141
         3,869,328
Schedule of income and social contribution taxes reconciliation

  12.31.21   12.31.20 12.31.19
         
Income (loss) before taxes - continued operations           (34,788)          1,352,234          882,938
Nominal tax rate 34%   34% 34%
Benefit (expense) at nominal rate            11,828           (459,759)         (300,199)
Adjustments to income taxes        
Income from associates and joint ventures              8,626                       -            73,995
Difference of tax rates on results of foreign subsidiaries          244,822          1,018,576              5,263
Difference of functional currency of foreign subsidiaries               (129)          1,142,762            73,380
Deferred tax assets not recognized (1)         (840,457)        (1,842,478)           (72,254)
Recognition of tax assets from previous years (2)        1,025,000            361,000            33,790
Interest on overpayment of taxes (3)          104,789                       -                     -
Profits taxed by foreign jurisdictions           (33,455)             (63,252)           (79,435)
Share-based payment           (24,454)             (22,774)           (14,172)
Transfer price           (71,634)             (40,568)           (16,966)
Penalties           (11,042)               (5,261)           (48,633)
Investment grant          109,591              52,279            64,127
Reversal (recognition) of provision with no deferred tax constituted                     -                       -          481,356
Other permanent differences            28,617              32,238             (4,857)
Total          552,102            172,763          195,395
         
Effective rate 1587.0%   -12.8% -22.1%
         
Current tax         (255,642)             (77,373)           (94,699)
Deferred tax          807,744            250,136          290,094
(1)Amount related to the non-recognition of deferred tax on tax losses carryforward for the year ended December 31, 2021, in the amount of R$2,472,126, due to limited capacity of realization (note 10.2).
(2)The Company prepared recoverability study for deferred tax assets (according to note 10.2) and, based on it, recognized an asset in the amount of R$1,025,000.
(3)Related the non-taxation of interest on tax overpayments. Includes the amount of R$79,639 referring to previous years (note 9.4)