| Income tax |
Note 23. Income tax
Considering that the Company
is domiciled in Cayman and there is no income tax in that jurisdiction, the combined tax rate of 34% demonstrated below is the current
rate applied to the Group which is the operational and main company of all operating entities of the Group in Brazil. Current tax
Income tax on net profit
or loss was calculated in accordance with applicable Brazilian law, applying tax rates for regular and presumed income tax regime, as
described in note 3 related to taxation.
The income tax recorded in
income for the years ended December 31, 2024, 2023, and 2022, is as follows:
| | |
2024 | | |
2023 | | |
2022 | |
| Loss before income tax | |
| (68,706 | ) | |
| (244,304 | ) | |
| (112,430 | ) |
| Income tax credit at the combined rate of 34% | |
| 23,360 | | |
| 83,063 | | |
| 38,226 | |
| Adjustments for the demonstration of the effective rate: | |
| | | |
| | | |
| | |
| Non-deductible expenses | |
| 2,370 | | |
| 385 | | |
| (34 | ) |
| Presumed income tax calculation effect(i) | |
| - | | |
| - | | |
| (200 | ) |
| Unrecognized tax loss carryforwards and temporary differences(ii) | |
| (45,123 | ) | |
| (97,273 | ) | |
| (44,790 | ) |
| Deferred tax liability expenses from identifiable assets acquired of businesses | |
| 5,072 | | |
| 5,072 | | |
| 5,635 | |
| Research and development tax benefit | |
| 4,816 | | |
| 3,247 | | |
| - | |
| Other | |
| 2 | | |
| 1,948 | | |
| (613 | ) |
| Income tax recorded in the income for the year | |
| (9,503 | ) | |
| (3,558 | ) | |
| (1,776 | ) |
| | |
| | | |
| | | |
| | |
| Current tax | |
| (13,518 | ) | |
| (9,751 | ) | |
| (5,769 | ) |
| Deferred tax | |
| 4,015 | | |
| 6,193 | | |
| 3,993 | |
| Effective tax rate | |
| 13.83 | % | |
| 1.46 | % | |
| 1.58 | % |
| (i) | As described in note 3, the taxation under Brazilian Tax Law allows certain companies to calculate income taxes as a percentage of gross revenue, using the presumed income tax regime. The effect of the presumed income tax of certain subsidiaries represents the difference between the taxation based on this method and the amount that would be due based on the regular income tax rate applied to the taxable profit of the subsidiaries. |
| (ii) | The Company has not recorded a deferred tax asset on tax loss carryforwards and temporary differences as the Company does not expect to realize these tax benefits in the foreseeable future. Tax losses may be carried forward indefinitely, though the amount of the carryforward that can be utilized is limited to 30% of taxable income in each carryforward year. As of December 31, 2024, 2023, and 2022, the Group had total tax losses of R$249.7 million, R$124.7 million, and R$78.6 million, respectively. | Deferred tax liability
As of December 31, 2024 and 2023, deferred tax liabilities are recognized
for the temporary differences between the book and tax basis of intangible assets recorded in connection with business combinations in
the amount of R$40.6 million and R$44.6 million, respectively.
|