| Income Taxes |
| 10.1 | Deferred income taxes |
|
| (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. |
On December 31, 2024, the Company has tax losses
at local income tax rates represent the amount of R$6,380,870 (R$6,782,499 for the year ended December 31, 2023). Of these amounts, R$3,459,022
(R$3,444,499 as at December 31, 2023) are recognized in assets, according to the expectation of recoverability over a ten-year period
The roll-forward of deferred income taxes, net,
is set forth below:
| Schedule
of deferred income taxes, net |
|
|
|
| |
|
| |
12.31.24 |
|
12.31.23 |
| Beginning balance |
2,052,983 |
|
2,454,998 |
| Deferred income taxes recognized in income |
(8,180) |
|
244,172 |
| Deferred income taxes recognized in other comprehensive income |
282,988 |
|
(217,297) |
| Deferred income and social contribution taxes used in the leniency agreement |
- |
|
(435,128) |
| Other |
1,288 |
|
6,238 |
| Ending balance |
2,329,079 |
|
2,052,983 |
| 10.2 | Effective income tax rate reconciliation |
| Schedule of effective income tax rate reconciliation |
|
|
|
|
|
| |
|
|
|
| |
12.31.24 |
|
12.31.23 |
|
12.31.22 |
| |
|
|
|
|
|
| Income (loss) before taxes |
5,049,873 |
|
(1,984,706) |
|
(2,805,044) |
| Nominal tax rate |
34% |
|
34% |
|
34% |
| Expenses at nominal tax rates |
(1,716,957) |
|
674,800 |
|
953,715 |
| Adjustments to income taxes |
|
|
|
|
|
| Income from associates and joint ventures |
(4,649) |
|
(1,110) |
|
366 |
| Tax rate, GAAP and permanent differences on the results of a subsidiary |
62,206 |
|
(536,428) |
|
212,753 |
| Effect of exchange rate variation on assets and liabilities of subsidiaries |
922,204 |
|
(190,743) |
|
(538,002) |
| Deferred tax assets not recognized |
- |
|
- |
|
(967,103) |
| Interest on equity capital |
389,640 |
|
- |
|
- |
| Interest on taxes |
74,652 |
|
140,056 |
|
83,235 |
| Profits taxed by foreign jurisdictions |
(329,147) |
|
(110,655) |
|
(31,400) |
| Tax paid on international subsidiaries |
141,206 |
|
26,416 |
|
21,061 |
| Recognition of tax assets from previous years |
11,722 |
|
61,348 |
|
(77,964) |
| Provision for contingencies (1) (IRPJ and CSLL) |
(977,277) |
|
- |
|
- |
| Other permanent differences |
68,431 |
|
52,170 |
|
57,705 |
| Total |
(1,357,969) |
|
115,854 |
|
(285,634) |
| |
|
|
|
|
|
| Effective rate |
26.9% |
|
5.8% |
|
-10.2% |
| |
|
|
|
|
|
| Current tax |
(1,349,789) |
|
(128,318) |
|
(77,574) |
| Deferred tax |
(8,180) |
|
244,172 |
|
(208,060) |
| (1) | Contingency reported in note 20.2.1. |
Income tax returns in Brazil are subject
to review by the tax authorities for a period of five years from the date of their delivery. The Company may be subject to additional
collection of taxes, fines and interest as a result of these reviews. The results obtained by subsidiaries abroad are subject to taxation
in accordance with the tax laws of each country.
Income
taxes
|
Accounting policy:
Current income taxes: In Brazil it comprises
income tax (“IRPJ“) and social contribution on profit (“CSLL“), which are calculated monthly based on taxable
profit, after offsetting tax losses and negative social contribution base, limited to 30% of the taxable income, applying the rate of
15% plus an additional 10% for the IRPJ and 9% for the CSLL.
The results obtained from foreign subsidiaries are
subject to taxation by the countries where they are based, according to applicable rates and legislation. In Brazil, these results suffer
the effects of taxation on universal basis established by the Law No. 12,973 / 14. The Company analyzes the results of each subsidiary
for the application of its Income Tax legislation, in order to respect the treaties signed by Brazil and avoid double taxation.
Deferred income taxes: These
are recognized when there are tax credits and debits on tax losses and negative CSLL bases, as well as temporary differences between the
tax base and the accounting base. Deferred tax assets and liabilities are classified as non-current. When the company's internal studies
indicate that the future use of these credits over a 10-year horizon is not probable, the asset is derecognized (note 10.1).
Deferred tax assets and
liabilities are presented net if there is enforceable legal right to be offset, and if they are under the responsibility of the same tax
authority and under the same taxable entity.
Deferred tax
assets and liabilities must be measured at the rates applicable in the year in which the asset is realized or the liability is settled,
based on the tax rates that have been enacted or substantively enacted by the end of the reporting period.
In compliance
with the interpretation ICPC 22 / IFRIC 23, the Company analyzed relevant tax decisions of higher courts and whether they conflict in
any way with the positions adopted by the Company. Regarding the known uncertain tax positions, the Company reviewed the corresponding
legal opinions and jurisprudence and did not identify impacts to be recorded.
The Company periodically assesses the positions
taken in which there are uncertainties about the tax treatment adopted and sets up a provision when applicable. |
|