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RECOVERABLE TAXES
 12 Months Ended
Dec. 31, 2022
Recoverable Taxes  
RECOVERABLE TAXES

 

9.RECOVERABLE TAXES

The rollforward of recoverable taxes are set forth below:

                               
                                 
    Note   12.31.21   Additions   Offset / Reversals   Transfers (1)   Interest   Exchange variation   12.31.22
ICMS and VAT   9.1                            
Recoverable ICMS and VAT         1,886,027     768,497     (216,040)   (192,244)     242    (27,025)     2,219,457
(-) Impairment       (137,854)     (28,214)   23,332   16,507    -    -   (126,229)
PIS and COFINS   9.2                            
Recoverable PIS and COFINS         2,685,276     649,054     (880,317)    -    134,561    -     2,588,574
(-) Impairment         (14,228)    -   -    -    -    -     (14,228)
IPI   9.3                            
Recoverable IPI         929,645   18,700   (8,388)    -   76,416    -     1,016,373
(-) Impairment        (1,984)    -    1,984    -    -    -   -
INSS                                
Recoverable INSS         318,138   46,537    (20,154)    -   21,715    -     366,236
Other                                
Other recoverable taxes       92,216   22,767   (7,265)    -    -   (135)     107,583
(-) Impairment        (1,007)    (575)   33    -    -    -    (1,549)
          5,756,229     1,476,766   (1,106,815)   (175,737)    232,934    (27,160)     6,156,217
                                 
Current         976,133                         1,229,272
Non-current         4,780,096                         4,926,945
                                 
        12.31.21   Additions   Offset / Reversals   Transfers (1)   Interest   Exchange variation   12.31.22
Income taxes   9.4                            
Recoverable income taxes         294,050     203,796    (55,895)    -     3,280    (10,839)     434,392
(-) Impairment         (15,933)    36   -    -    -    -     (15,897)
          278,117     203,832    (55,895)    -     3,280    (10,839)     418,495
                                 
Current       71,762                         173,596
Non-current         206,355                         244,899
(1)The transfers occur from Recoverable Taxes to Other Current Assets and Other Non-Current Assets when sales of credits are made to third parties.

 

                                     
                                     
    Note   12.31.20   Business combination   Additions   Offset / Reversals   Transfers (1)   Interest   Exchange variation   12.31.21
ICMS and VAT   9.1                                
Recoverable ICMS and VAT         1,568,975     6,479     668,918     (185,750)   (160,278)     239    (12,556)     1,886,027
(-) Impairment       (154,721)    -     (30,661)     29,133   18,395    -    -   (137,854)
PIS and COFINS   9.2                                
Recoverable PIS and COFINS         3,168,099   34,259     471,560     (1,065,504)    -   76,862    -     2,685,276
(-) Impairment         (14,228)    -    -   -    -    -    -     (14,228)
IPI   9.3                                
Recoverable IPI         808,528     1,109     7,392   (2,363)    -    114,979    -     929,645
(-) Impairment        (1,984)    -    -   -    -    -    -    (1,984)
INSS                                    
Recoverable INSS         341,825   12   36,829    (66,810)    -     6,282    -     318,138
(-) Impairment        (102)    -     102   -    -    -    -   -
Other                                    
Other recoverable taxes       52,889     3,995   39,427   (4,057)    -    -     (38)   92,216
(-) Impairment        (1,963)    -    99    857    -    -    -    (1,007)
Total          5,767,318   45,854     1,193,666     (1,294,494)   (141,883)    198,362    (12,594)     5,756,229
                                     
Current         899,120                             976,133
Non-current         4,868,198                             4,780,096
                                     
    Note   12.31.20   Business combination   Additions   Offset / Reversals   Transfers (1)   Interest   Exchange variation   12.31.21
Income taxes   9.4                                
Recoverable income taxes         107,728    922     246,162    (60,058)    -    18   (722)     294,050
(-) Impairment        (9,029)    -    (6,904)   -    -    -    -     (15,933)
Total        98,699    922     239,258    (60,058)    -    18   (722)     278,117
                                     
Current       43,840                           71,762
Non-current       54,859                             206,355

 

9.1.    ICMS – Tax on Movement of Goods and Services and VAT – Value Added Taxes

As result of the activity, the Company generates recoverable ICMS balances that are offset against ICMS payables arising from sales in the domestic market or that are transferred to third parties.

The Company has recoverable ICMS balances in the States of Paraná, Santa Catarina, Mato Grosso do Sul, Minas Gerais and Amazonas, which will be realized in the short and long term, based on the recoverability study reviewed and approved by the Management.

In other jurisdictions outside Brazil, value added taxes (VAT) are due in regular operations of the Company with goods and services.

 

9.2.    PIS and COFINS –Social Integration Plan and Contribution for Social Security Financing

The accumulated recoverable PIS and COFINS balances arise from taxes on raw material purchases subsequently used in the production of exported products or products for which sale is not taxed, as well as recoverable taxes on commercial and labor expenses. The realization of these balances usually occurs through the offsetting with taxes payable on sales of taxed products in the domestic market, with other federal taxes and social security contributions payable, or even, if necessary, through refund or reimbursement requests.

As of December 31, 2022, the updated balance of the processes related to the exclusion of the ICMS from the PIS and COFINS calculation basis recognized by the Company is R$2,091,340 (R$2,341,737 as of December 31, 2021). The amount of R$384,956 related do these credits was offset against other federal taxes for the year ended December 31, 2022 (R$628,557 for the year ended December 31, 2021).

 

9.3.    IPI - Industrialized Product Tax

The Company recognized tax assets as result of gains from lawsuits related to IPI, specially “crédito prêmio”. The balance referring to these assets on December 31, 2022 is R$1,030,940 (R$945,845 for the year ended December 31, 2021), of which R$1,008,683 (R$919,982 for the year ended December 31, 2021) is recorded as Recoverable Taxes and the remainder, referring to cases in which the government will reimburse in cash, is recorded as Other Non-Current Assets, in the amount of R$22,257 (R$16,927 for the year ended December 31, 2021).

9.4.    Income Taxes

The accumulated recoverable income taxes arise, mostly, from withholding taxes on securities, interest and prepayments of income tax and social contribution in Brazil. The realization occurs through the offset with federal taxes and contributions payable.

9.5.    Realization of Brazilian federal tax credits

The Company received in cash, through court orders related to recoverable IPI balances, the amount of R$8,936 for the year ended December 31, 2022 (R$32,802 for the year ended December 31, 2021).

The Company used PIS, COFINS, IPI, IRPJ, CSLL, INSS and other recoverable taxes to offset federal taxes payable such as INSS and Income Taxes in the amount of R$924,027 for the year ended December 31, 2022 (R$1,153,520 in the Consolidated for the year ended December 31, 2021), preserving its liquidity and optimizing its capital structure.