| 2017 | 2016
|
2015 | ||||
| Current income tax and social contribution | ||||||
| Income tax for the year | (203,932) | (309,695) | (358,188) | |||
| Social contribution for the year | (77,148) | (110,997) | (132,754) | |||
| Tax incentive – SUDENE/SUDAM (*) | 112,493 | 118,250 | 93,123 | |||
| (168,587) | (302,442) | (397,819) | ||||
| Deferred income tax and social contribution | ||||||
| Deferred income tax | (23,976) | 29,482 | (378,168) | |||
| Deferred social contribution | (8,631) | 9,947 | (136,140) | |||
| (32,607) | 39,429 | (514,308) | ||||
| Provision for income tax and social contribution | 185 | 124 | (3,464) | |||
| (32,422) | 39,553 | |||||
| (201,009) | (262,889) | (915,591) |
The reconciliation of income tax and social contribution expenses calculated at the applicable tax rates, plus the amounts reflected in the statement of income, is set out below:
| 2017 | 2016 | 2015 | |||
Income before income tax and social contribution |
1,435,516 |
1,013,316 |
3,001,033 | ||
| Combined tax rate |
34% |
34% |
34% | ||
| Combined tax rate on income tax and social contribution |
(488,075) |
(344,527) |
(1,020,351) | ||
| (Additions)/Exclusions: | |||||
| Unrecognized/recognized tax losses and temporary differences |
68,716 |
6,611 |
(4,106) | ||
| Permanent additions and exclusions: | |||||
| Non-deductible expenses for tax purposes | (6,638) | (18,634) | (24,410) | ||
| Financial lease impact | (35,872) | (30,700) | 27,546 | ||
| Tax benefit of interest on shareholders’ equity allocated | 64,597 | - | - | ||
| SUDENE/SUDAM tax incentive (*) | 112,498 | 118,250 | 93,123 | ||
| Use of previously unrecognized tax losses | 11,176 | - | - | ||
| Other amounts | 72,589 | 6,111 | 12,607 | ||
| 287,066 |
81,638 |
104,760 | |||
| Income tax and social contribution recorded in income for the year |
(201,009) |
(262,889) |
(915,591) | ||
Effective tax rate |
14.00% |
25.94% |
30.51% |
(*) As mentioned in Note 25 b.3, according to Article 443, item I, of Decree No. 3000/1999, investments in subsidies are not to be considered within the taxable income, and must be recorded as capital reserves, to be used only to offset losses or increase the capital stock. The subsidiary TIM Celular has tax benefits compliant with these rules.