21 Deferred income tax

Deferred income taxes are calculated in full on temporary differences under the liability method using the tax rate of each country.

The evolution of deferred tax assets and liabilities during the year are as follows:

Deferred tax liabilities

(all amounts in thousands of U.S. dollars)	Fixed assets			Inventories			Intangible and Other			Total
At the beginning of the year		651,339			19,396			118,062			788,797
Translation differences		1,644			-			253			1,897
Increase due to business combinations		89,306			-			43,397			132,703
Charged to other comprehensive income		-			-			(1,194	)		(1,194	)
Income statement (credit)		(39,874	)		(4,141	)		(34,725	)		(78,740	)
At December 31, 2020		702,415			15,255			125,793			843,463

(all amounts in thousands of U.S. dollars)	Fixed assets			Inventories			Intangible and Other			Total
At the beginning of the year		710,995			25,048			46,532			782,575
Translation differences		(347	)		-			(4	)		(351	)
Increase due to business combinations		5,621			-			11,209			16,830
Charged to other comprehensive income		-			-			423			423
Income statement charge / (credit)		(64,930	)		(5,652	)		59,902			(10,680	)
At December 31, 2019		651,339			19,396			118,062			788,797

Deferred tax assets

(all amounts in thousands of U.S. dollars)	Provisions and allowances			Inventories			Tax losses			Other			Total
At the beginning of the year		(19,653	)		(93,404	)		(382,832	)		(181,606	)		(677,495	)
Translation differences		1,804			513			1,996			644			4,957
Increase due to business combinations		(7,452	)		(24,580	)		(33,598	)		(34,974	)		(100,604	)
Charged to other comprehensive income		-			-			-			(1,952	)		(1,952	)
Income statement charge / (credit)		4,093			31,534			(65,715	)		10,930			(19,158	)
At December 31, 2020		(21,208	)		(85,937	)		(480,149	)		(206,958	)		(794,252	)

(all amounts in thousands of U.S. dollars)	Provisions and allowances			Inventories			Tax losses			Other			Total
At the beginning of the year		(16,116	)		(86,585	)		(396,257	)		(86,184	)		(585,142	)
Translation differences		362			306			497			286			1,451
Increase due to business combinations		(1,160	)		(1,413	)		(1,172	)		(2,238	)		(5,983	)
Charged to other comprehensive income		-			-			-			(1,261	)		(1,261	)
Income statement charge / (credit)		(2,739	)		(5,712	)		14,100			(92,209	)		(86,560	)
At December 31, 2019		(19,653	)		(93,404	)		(382,832	)		(181,606	)		(677,495	)

In 2019 the effect of the adoption of IFRS 16 has been recognized as “Other” both for deferred tax assets and liabilities.

Deferred tax assets related to taxable losses of Tenaris subsidiaries are recognized to the extent it is considered probable that future taxable profits will be available against which such losses can be utilized in the foreseeable future. This amount includes $438.8 million related to U.S. subsidiaries mainly due to the recognition of accelerated fiscal depreciations, as well as the amounts related to the acquisition of IPSCO. The U.S. subsidiaries have incurred in fiscal losses in the past years. The remaining balance mainly corresponds to Tenaris’s Colombian, Japanese, Canadian and Saudi Arabian subsidiaries. These subsidiaries have incurred in fiscal losses in the past one or two years. Tenaris has concluded that these deferred tax assets will be recoverable based on the business plans and budgets.

The expiration dates of the recognized tax losses in less than 1 year, between 2 and 5 years and in more than 5 years is approximately 0%, 1.7% and 98.3% respectively.

As of December 31, 2020, the net unrecognized deferred tax assets amounted to $173.7 million. The expiration dates of the unrecognized tax losses less than 1 year, between 2 and 5 years and more than 5 years is approximately 4.6%, 17.1% and 78.3% respectively.

The estimated recovery analysis of deferred tax assets and deferred tax liabilities is as follows:

(all amounts in thousands of U.S. dollars)		Year ended December 31,
	2020			2019
Deferred tax assets to be recovered after 12 months		(640,603	)		(538,274	)
Deferred tax liabilities to be settled after 12 months		840,892			766,852

Deferred income tax assets and liabilities are offset when (1) there is a legally enforceable right to set-off current tax assets against current tax liabilities and (2) when the deferred income taxes relate to the same fiscal authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis. The following amounts, determined after appropriate set-off, are shown in the Consolidated Statement of Financial Position:

(all amounts in thousands of U.S. dollars)		Year ended December 31,
	2020			2019
Deferred tax assets		(205,590	)		(225,680	)
Deferred tax liabilities		254,801			336,982
		49,211			111,302

The movement in the net deferred income tax liability account is as follows:

		Year ended December 31,
	2020			2019
At the beginning of the year		111,302			197,433
Translation differences		6,854			1,100
Increase due to business combinations		32,099			10,847
Charged to other comprehensive income		(3,146	)		(838	)
Income statement (credit)		(97,898	)		(97,240	)
At the end of the year		49,211			111,302