| a) | The balances and concepts of deferred tax assets and liabilities are detailed as follows: |
| Description of deferred tax assets | As of December 31, 2017 ThCh$ |
As of December 31, 2016 ThCh$ |
||||||
| Depreciations | 201,246 | 9,114 | ||||||
| Amortizations | 2,833 | — | ||||||
| Inventory | 2,093,554 | 2,638,404 | ||||||
| Provisions | 7,467,232 | 8,515,173 | ||||||
| Employee benefit obligations | 572,681 | 558,565 | ||||||
| Non-financial tax income | 2,241,925 | 3,046,028 | ||||||
| Tax losses | 2,813,502 | 174,151 | ||||||
| Other | 959,137 | 243,405 | ||||||
| Deferred tax assets | 16,352,110 | 15,184,840 | ||||||
| As of December 31, 2017 |
As of December 31, 2016 |
|||||||
| Description of deferred tax liabilities | ThCh$ | ThCh$ | ||||||
| Depreciations | 20,563,486 | 21,700,065 | ||||||
| Amortizations | 4,395,158 | 5,512,803 | ||||||
| Provisions | — | 430 | ||||||
| Capitalized tax expenses | 16,064,814 | 13,093,478 | ||||||
| Employee benefit obligations | 5,453 | — | ||||||
| Property, plant and equipment revaluation | 9,480,283 | 9,480,283 | ||||||
| Assets and liabilities for business combinations revaluation | 1,216,548 | — | ||||||
| Other | 1,647,416 | 601,231 | ||||||
| Deferred tax liabilities | 53,373,158 | 50,388,290 | ||||||
| b) | Information on taxes regarding entries charged to net Equity |
The Company has recognized entries with effect in equity, which gave rise to deferred tax detailed as follows:
| As of December 31, 2017 |
As of December 31, 2016 |
|||||||
| Description of deferred tax liabilities (assets), recognized | ThCh$ | ThCh$ | ||||||
| Land revaluation | 9,480,283 | 9,480,283 | ||||||
| Marketable securities revaluation | (31,428 | ) | 17,109 | |||||
| Obligations with employees | 5,453 | (23,736 | ) | |||||
| Deferred tax liabilities, recognized, total | 9,454,308 | 9,473,656 | ||||||
| c) | Changes in deferred taxes |
Changes on items of “deferred taxes” of the consolidated statements of financial position for the years 2017 and 2016 are detailed as follows:
| Assets | Liabilities | |||||||
| Movements in deferred taxes | ThCh$ | ThCh$ | ||||||
| Balance as of January 1, 2015 | 13,242,753 | 48,793,801 | ||||||
| Increase (decrease) in profit or loss | 1,942,087 | 1,604,327 | ||||||
| Increase (decrease) in equity | — | (7,719 | ) | |||||
| Balance conversion adjustments (profit or loss) | — | (2,119 | ) | |||||
| Balance as of December 31, 2016 | 15,184,840 | 50,388,290 | ||||||
| Increase (decrease) in profit or loss | 1,167,270 | 1,951,805 | ||||||
| Increase (decrease) in equity | — | (19,348 | ) | |||||
| Increase (decrease) for business combination | — | 1,216,548 | ||||||
| Balance conversion adjustments (profit or loss) | — | (164,137 | ) | |||||
| Balance as of December 31, 2017 | 16,352,110 | 53,373,158 | ||||||
| d) | Detail of income tax expense. |
| 1. | The expense (income) for income tax, differentiated between deferred taxes and income tax, for 2017, 2016 and 2015 are as follows: |
| As of December 31, 2017 |
As of December 31, 2016 |
As of December 31, 2015 |
||||||||||
| Description of current and deferred tax expenses (benefit) | ThCh$ | ThCh$ | ThCh$ | |||||||||
| Current income tax expense | ||||||||||||
| Current tax expense | 11,705,092 | 16,783,597 | 13,655,331 | |||||||||
| Adjustment to prior year current tax | 988,641 | 1,014,790 | 1,861,006 | |||||||||
| Other current tax expenses | 241,520 | 81,792 | 133,953 | |||||||||
| Total current income tax expense, net | 12,935,253 | 17,880,179 | 15,650,290 | |||||||||
| Deferred tax expense (benefit) related to the creation and reversal of temporary differences | 162,848 | (1,801,805 | ) | (422,630 | ) | |||||||
| Deferred tax expense (benefit) related to changes in the tax rate or new rates | 621,687 | 1,464,045 | 1,290,432 | |||||||||
| Total deferred tax expense (benefit), net | 784,535 | (337,760 | ) | 867,802 | ||||||||
| Income tax expense (benefit) | 13,719,788 | 17,542,419 | 16,518,092 | |||||||||
| 2. | The composition of the expense (income) from income tax, considering the source (domestic or foreign) and the type of tax, for 2017, 2016 and 2015 are detailed as follows: |
| From
January 1 to December 31, 2017 |
From
January 1 to December 31, 2016 |
From
January 1 to December 31, 2015 |
||||||||||
| Description of tax expense (benefit) by foreign and domestic party | ThCh$ | ThCh$ | ThCh$ | |||||||||
| Current tax expense by foreign and domestic parties, net | ||||||||||||
| Total current income tax expense, net, foreign | 2,176,477 | 5,061,256 | 5,056,309 | |||||||||
| Total current income tax expense, net, domestic | 10,472,755 | 12,818,924 | 10,593,981 | |||||||||
| Total current tax expense, net | 12,649,232 | 17,880,180 | 15,650,290 | |||||||||
| Deferred tax expense by foreign and domestic parties, net | ||||||||||||
| Total deferred tax expense, net, foreign | (1,158,442 | ) | (107,621 | ) | 1,641,250 | |||||||
| Total deferred tax expense, net, domestic | 2,228,998 | (230,140 | ) | (773,448 | ) | |||||||
| Total deferred tax expense, net | 1,070,556 | (337,761 | ) | 867,802 | ||||||||
| Income tax expense (benefit) | 13,719,788 | 17,542,419 | 16,518,092 | |||||||||
| e) | Reconciliation of income tax expense |
| 1. | Reconciliation of values in which are indicated the amounts that give rise to variations of the income tax expense recorded in the Statement of income, beginning from the tax amount resulting after applying the taxable rate on “Income before taxes”. |
| From January 1 | From January 1 | From January 1 | ||||||||||
| to December 31, 2017 | to December 31, 2016 | to December 31, 2015 | ||||||||||
| Reconciliation of tax expense | ThCh$ | ThCh$ | ThCh$ | |||||||||
| Tax expense using the legal rate | 15,612,426 | 15,857,282 | 15,048,187 | |||||||||
| Tax effect of rates in other jurisdictions | 1,196,029 | 3,206,568 | 3,427,905 | |||||||||
| Tax effect of non-taxable revenue | (2,305,118 | ) | (223,562 | ) | (1,204,968 | ) | ||||||
| Tax effect of non-deductible expenses | 1,309,434 | 321,384 | 106,398 | |||||||||
| Tax effect of decrease in the tax rate in Argentina and USA (%) | (2,266,914 | ) | — | — | ||||||||
| Tax effect of increase in the tax rate in Chile (%) | 621,686 | 1,464,046 | 1,294,810 | |||||||||
| Other increases (decreases) in the legal tax charge (%) | (447,755 | ) | (3,083,299 | ) | (2,154,240 | ) | ||||||
| Total adjustments to tax expense using the legal rate | (1,892,638 | ) | 1,685,137 | 1,469,905 | ||||||||
| Tax expense using the effective rate | 13,719,788 | 17,542,419 | 16,518,092 | |||||||||
In Argentina, on December 29, 2017, Law No. 27,430 is issued, which establishes that the income tax rate for capital companies and permanent establishments is reduced from 35% to 30% for the years beginning on January 1, 2018 and through December 31, 2019 and to 25% for the years thereafter beginning on January 1, 2020. Dividends distributed to the mentioned companies are also taxed with an aliquot of 7%, or 13% for the mentioned periods, respectively.
In this case, this amendment affect the calculation of deferred tax, which effect is a lower liability (less expense), amounting to ThCh$ 33,050 (ARS 970,193).
In addition, the Company’s consolidated operating results for the year ended December 31, 2017 include the effect of the recent Tax Reform (“Tax Cuts and Jobs Act”), enacted on December 22, 2017 in the United States of America. Among its several amendments introduced by such Reform it contemplates the reduction of the corporate tax federal rate from 34% to 21%. Such reduction in the federal rate of such tax, which is effective from January 1, 2019 required the company to recalculate its deferred tax assets and liabilities in its financial statements using the new rate of 21%. As a result of this calculation, deferred tax liabilities decreased (less expense) by ThCh$2,233,864 (US$3,633,776).
| 2. | Reconciliation of effective tax rate (%), showing changes to the current rate (25.50% as of December 31, 2017, 24.0% as of December 31, 2016 and 22.5% as of December 31,2015). |
| Description | As of December 31, 2017 |
As of December 31, 2016 |
As of December 31, 2015 |
|||||||||
| Tax expense using the legal rate (%) | 25.50 | % | 24.00 | % | 22.50 | % | ||||||
| Tax effect of rates in other jurisdictions (%) | 1.95 | % | 4.85 | % | 5.13 | % | ||||||
| Tax effect of non-taxable revenue (%) | (3.76 | %) | (6.24 | %) | (1.79 | %) | ||||||
| Tax effect of non-deductible expenses (%) | 2.14 | % | 0.95 | % | 0.16 | % | ||||||
| Tax effect of decrease in the tax rate in Argentina and USA (%) | (3.70 | %) | 0.00 | % | 0.00 | % | ||||||
| Tax effect of increase in the tax rate in Chile (%) | 1.02 | % | 2.22 | % | 1.94 | % | ||||||
| Other increases (decreases) in the legal tax charge (%) | (0.74 | %) | 0.77 | % | (3.23 | %) | ||||||
| Total adjustments to tax expense using the legal rate (%) | (3.09 | %) | 2.55 | % | 2.21 | % | ||||||
| Tax expense using the effective rate (%) | 22.41 | % | 26.55 | % | 24.71 | % | ||||||
| f) | The detail of current tax assets is as follows: |
| As of December 31, 2017 |
As of December 31, 2016 |
|||||||
| Description | ThCh$ | ThCh$ | ||||||
| Monthly provisional tax payments and other recoverable taxes | 28,325,391 | 17,332,163 | ||||||
| Income tax credits | 1,734,392 | 169,443 | ||||||
| Total | 30,059,783 | 17,501,606 | ||||||
| g) | The detail of current tax liabilities is as follows: |
| As of December 31, 2017 |
As of December 31, 2016 |
|||||||
| Description | ThCh$ | ThCh$ | ||||||
| Income tax | 14,549,204 | 28,251,874 | ||||||
| Provision for taxes | 4,260,475 | 1,369,384 | ||||||
| Other | 3,887 | 607 | ||||||
| Total | 18,813,566 | 29,621,865 | ||||||