BUENAVENTURA MINING CO INC | CIK:0001013131 | 3

  • Filed: 4/30/2018
  • Entity registrant name: BUENAVENTURA MINING CO INC (CIK: 0001013131)
  • Generator: DataTracks
  • SEC filing page: http://www.sec.gov/Archives/edgar/data/1013131/000114420418023941/0001144204-18-023941-index.htm
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    • ifrs-full:DisclosureOfIncomeTaxExplanatory

    19.
    Tax situation
     
    (a)
    Current tax regime -
    The Company and its Peruvian subsidiaries are subject to the Peruvian tax regime.
     
    By means of Law N° 1261 enacted on December 10, 2016, the Peruvian government introduced certain amendments to the Income Tax Law, effective January 1, 2017. The most relevant are listed below:
     
    -
    A corporate income tax rate of 29.5% is set.
     
    -
    A tax of 5% of the income tax is established to the dividends or any other form of distribution of profits.
     
    -
    The rate applicable to dividends will be considered taking into account the year in which the results or profits that form part of the distribution have been obtained, according to the following: 4.1% with respect to the results obtained until December 31, 2014; 6.8% with respect to the results obtained during the years 2015 and 2016; and 5% with respect to the results obtained from January 1, 2017.
     
    -
    It has been established that the distribution of dividends to be made corresponds to the oldest retained earnings.
     
    (b)
    Years open to tax review -
    During the four years following the year of filing the tax return, the tax authorities have the power to review and, as applicable, correct the income tax computed by the Group. The Income Tax and Value Added Tax returns for the following years are open to review by the Tax Authorities:
     
    Entity
    Years open to review by the
    Tax Authorities
     
     
    Compañía de Minas Buenaventura S.A.A.
    2013-2017
    Bisa Construcción S.A. (absorbed by Buenaventura Ingenieros S.A. in 2015)
    2014-2015
    Buenaventura Ingenieros S.A.
    2013, 2015-2017
    Compañía de Exploraciones, Desarrollo e Inversiones Mineras S.A.C. – CEDIMIN (absorbed by the Company in 2013)
    2013
    Compañía Minera Condesa S.A.
    2013-2017
    Compañía Minera Colquirrumi S.A.
    2013-2017
    Consorcio Energético de Huancavelica S.A.
    2013-2017
    Contacto Corredores de Seguros S.A.
    2014-2017
    El Molle Verde S.A.C.
    2013-2017
    Empresa de Generación Huanza S.A.
     2013, 2015, 2016, 2017
    Inversiones Colquijirca S.A.
    2013-2017
    Minera La Zanja S.R.L.
    2014-2017
    Sociedad Minera El Brocal S.A.A.
    2014-2017
    S.M.R.L. Chaupiloma Dos de Cajamarca
    2014-2017
    Procesadora Industrial Río Seco S. A.
     2014-2017
    Apu Coropuna S.R.L.
    2013-2017
    Cerro Hablador S. A. C.
    2013-2017
    Minera Azola S. R. L.
    2014-2017
     
    As of the date of issuance of this report, Compañía de Minas Buenaventura S.A.A. is been audited by the Tax Administration for the income tax of the year 2014.
     
    Due to the possible interpretations that the Tax Authorities may give to legislation in effect, it is not possible to determine whether or not any of the tax audits will result in increased liabilities for the Group. For that reason, any tax or surcharge that could arise from future tax audits would be applied to the income of the period in which it is determined. In management's opinion and its legal advisors, any possible additional payment of taxes in the entities mentioned before would not have a material effect on the consolidated financial statements as of December 31, 2017 and 2016.
     
    The open tax process of the Group and its associates are presented in note 28 (g).
     
    (c)
    Tax-loss carryforwards -
    As of December 2017 and 2016, the tax-loss carryforward determined by the Group amounts to approximately S/1,337,919,000 and S/1,347,159,000, respectively (equivalent to US$412,302,000 and US$415,149,000 respectively). As permitted by the Income Tax Law, the Group has chosen a system that permits to offset these losses with an annual cap equivalent to 50 percent of net future taxable income.
     
    The Group has decided to recognize a deferred income tax asset related to the tax-loss carryforward of those companies where is more likely than not that the tax-loss carryforward can be used to compensate future taxable net income.
     
    (d)
    Transfer pricing -
    For purposes of determining the Income Tax, the transfer prices for transactions with related companies and companies domiciled in territories with little or no taxation must be supported with documentation and information on the valuation methods used and the criteria considered for their determination. Tax Administration can request this information based on analysis of the Group's operations. The Group’s Management and its legal advisers believe that, as a result of the application of these standards, no material contingencies will arise for the Group as of December 2017 and 2016.