GAS TRANSPORTER OF THE SOUTH INC | CIK:0000931427 | 3

  • Filed: 4/16/2018
  • Entity registrant name: GAS TRANSPORTER OF THE SOUTH INC (CIK: 0000931427)
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    • ifrs-full:DisclosureOfIncomeTaxExplanatory

     
    14.
    INCOME TAX AND DEFERRED TAX

    Tax Reform

    The Tax Reform recently sanctioned in Argentina will bring with it a series of modifications in the taxation and calculation of the income tax to which the Company is subject in the normal course of its activities. The main changes are the following:

    Reduction in the applicable rate

    Until the fiscal year ended on December 31, 2017, the income tax rate remains at 35%. The tax reform establishes a gradual reduction of the applicable rate for the calculation of income tax, being 30% and 25% for fiscal periods beginning on January 1, 2018 and 2019 through January 1, 2020 onwards, respectively.

    The reduction in the applicable rate is complemented by the application of a tax on the distribution of dividends made to human persons and foreign beneficiaries, which the Company must withhold and enter to the Tax authority as a single and definitive payment when the dividends are paid. This additional tax will be 7% or 13%, depending on whether the dividends distributed correspond to earnings of a fiscal period in which the Company was reached at the rate of 30% or 25%, respectively. For these purposes it is considered, without admitting proof to the contrary, that the dividends that are made available correspond, firstly, to the oldest accumulated earnings.

    The effects as of December 31, 2017 of this change in the rate on the measurement of deferred assets and liabilities are detailed below in the section “Deferred tax”.

    Tax adjustment for inflation

    It is provided that for the determination of the net taxable income of the periods beginning on or after January 1, 2018, the adjustment for inflation obtained by application of the income tax law may be deducted or incorporated into the tax result for the fiscal year. This adjustment will proceed only if the percentage variation in the WPI, according to the tables drawn up by the tax authority for these purposes, will accumulate (a) a percentage higher than 100% in the 36 months prior to the end of the year, or (b) in the first and second fiscal year beginning on or after January 1, 2018, an accumulated variation, calculated from the first of them and until the close of each fiscal year, which exceeds 33% or 66%, respectively.

    Cost adjustment of acquisitions and investments made in fiscal years beginning on or after January 1, 2018

    A cost increase mechanism is established for assets acquired or investments made in fiscal years beginning on or after January 1, 2018. The adjustment will be made based on the percentage variations of the WPI. This adjustment mechanism will have a significant impact on the calculation of future taxable profits on which the Company must pay the income tax.

    Tax revaluation

    It establishes the possibility of carrying out the tax revaluation, for a single time, of certain assets that are part of the assets as of December 31, 2017, in order to adjust their value.

    This revaluation is optional, and to carry out the tax revaluation, a special tax must be paid. The special tax will vary between 8% and 15%, depending on the type of asset to be re-evaluated and it will be calculated between the difference of the residual revalued tax value and the tax residual value of origin.
     
    Once the option for a certain good is exercised, all other goods in the same category must be revalued.

    This tax is not deductible from income tax, and the asset increase that originates the revaluation is neither taxable for income tax nor taxable for TOMPI .

    The taxpayers that exercise the revaluation option shall waive to promote any judicial or administrative process for which the adjustment for tax inflation is claimed, if any. The exercise of the revaluation option must be elected only once in the term established in the regulation.

    As of the date of approval of these Consolidated Financial Statements, the Management has not yet decided whether it will make use of said option.

    Deferred Tax

    The reconciliation between the tax computed for tax purposes and the income tax expense charged to the statement of comprehensive income in the years ended December 31, 2017, 2016 and 2015 is as follows:

      
    2017
    		  
    2016
    		  
    2015
    		 
    Current income tax (expense) / gain
    		  
    (1,498,885
    )
    		  
    (482,721
    )
    		  
    68,626
    		 
    Deferred income tax
    		  
    143,855
    		   
    (6,583
    )
    		  
    44,927
    		 
    Income tax (expense) / gain
    		  
    (1,355,030
    )
    		  
    (489,304
    )
    		  
    113,553
    		 
     
    The analysis of the net deferred tax assets and liabilities is as follows:

      
    2017
    		  
    2016
    		 
    Deferred tax assets:
    		      
    Deferred tax assets to be recovered after more than 12 months
    		  
    276,751
    		   
    375,430
    		 
    Deferred tax assets to be recovered after less than 12 months
    		  
    26,880
    		   
    12,184
    		 
    Deferred tax liabilities:
    		        
    Deferred tax liabilities to be recovered after more than 12 months
    		  
    (522,764
    )
    		  
    (791,823
    )
    Deferred tax liabilities to be recovered after less than 12 months
    		  
    (53,729
    )
    		  
    (12,507
    )
    Deferred tax liabilities, net
    		  
    (272,862
    )
    		  
    (416,716
    )
     
    The components of the net deferred tax assets and liabilities as of December 31, 2017, 2016 and 2015 are the following:

    Deferred tax assets
    		 
    Allowance for
    doubtful
    accounts
    		  
    Tax credits
    discounted
    value loss
    		  
    Account
    receivables
    discounted
    value
    		  
    Provisions
    for legal
    claims and
    other
    provisions
    		  
    Financial
    lease
    		  
    Income tax
    loss
    carryforward
    		  
    Total
    		 
    As of December 31, 2015
    		  
    1,218
    		   
    5,261
    		   
    38
    		   
    71,360
    		   
    -
    		   
    58,936
    		   
    136,813
    		 
    Charge in results
    		  
    5,454
    		   
    (3,733
    )
    		  
    -
    		   
    26,846
    		   
    281,170
    		   
    (58,936
    )
    		  
    250,801
    		 
    As of December 31, 2016
    		  
    6,672
    		   
    1,528
    		   
    38
    		   
    98,206
    		   
    281,170
    		   
    -
    		   
    387,614
    		 
    Charge in results
    		  
    (6,672
    )
    		  
    (1,528
    )
    		  
    (38
    )
    		  
    (21,784
    )
    		  
    (53,961
    )
    		  
    -
    		   
    (83,983
    )
    As of December 31, 2017
    		  
    -
    		   
    -
    		   
    -
    		   
    76,422
    		   
    227,209
    		   
    -
    		   
    303,631
    		 

    Deferred tax liabilities
    		 
    Deferred sales
    		  
    Loans
    		  
    Property,
    plant and
    equipment
    		  
    Cash and
    cash
    equivalents
    		  
    Inventories
    		  
    Total
    		 
    As of December 31, 2015
    		  
    46
    		   
    (6,652
    )
    		  
    (539,622
    )
    		  
    (719
    )
    		  
    -
    		   
    (546,947
    )
    Charge in results
    		  
    -
    		   
    1,900
    		   
    (252,201
    )
    		  
    (7,082
    )
    		  
    -
    		   
    (257,383
    )
    As of December 31, 2016
    		  
    46
    		   
    (4,752
    )
    		  
    (791,823
    )
    		  
    (7,801
    )
    		  
    -
    		   
    (804,330
    )
    Charge in results
    		  
    (46
    )
    		  
    2,272
    		   
    229,318
    		   
    (3,350
    )
    		  
    (357
    )
    		  
    227,837
    		 
    As of December 31, 2017
    		  
    -
    		   
    (2,480
    )
    		  
    (562,505
    )
    		  
    (11,151
    )
    		  
    (357
    )
    		  
    (576,493
    )
     
    Income tax expense computed at the statutory tax rate on pre-tax income differs from the income tax expense for the years ended December 31, 2017, 2016 and 2015 as follows:
     
      
    2017
    		  
    2016
    		  
    2015
    		 
    Pre-tax income
    		  
    4,148,296
    		   
    1,419,982
    		   
    (285,662
    )
    Statutory income tax rate
    		  
    35
    %
    		  
    35
    %
    		  
    35
    %
    Pre-tax income at statutory income tax rate
    		  
    (1,451,904
    )
    		  
    (496,994
    )
    		  
    99,982
    		 
    Tax effects due to:
    		            
    -Change in the tax rate(1)
    		  
    102,634
    		   
    -
    		   
    -
    		 
    -Non-taxable income or non-deductible expenses
    		  
    (5,316
    )
    		  
    7,690
    		   
    13,571
    		 
    -Others
    		  
    (444
    )
    		  
    -
    		   
    -
    		 
    Income tax expense
    		  
    (1,355,030
    )
    		  
    (489,304
    )
    		  
    113,553
    		 
     
    (1)  Corresponds to the effect of the change in the enacted tax rate on the net deferred tax liability according to the aforementioned.