18.16) Deferred IT, and tax on dividends
The expense for IT includes both the current tax and deferred taxes. Tax is recognized in the statement of income, except when it relates to items recognized directly in OCI or in stockholders’ equity in which case, the tax is also recognized in OCI items or directly in stockholders’ equity, respectively.
Deferred IT were recorded based on the comprehensive method of liabilities, which consists of recognizing deferred taxes on all temporary differences between the book and tax values of assets and liabilities to be materialized in the future at the enacted or substantially enacted tax rates in effect at the consolidated financial statement date. See Note 14.
Deferred tax assets are only recognized if future tax profits are expected to be incurred against which temporary differences can be offset.
Deferred tax assets and liabilities from the temporary differences arising from the investments in subsidiaries and joint businesses are recognized, except when the Company controls the reversal period for such temporary differences and it is likely that the temporary differences will not be reverted in the near future.
Deferred IT are offset when there is a legal right for each entity to offset current tax assets against current tax liabilities and when deferred IT assets and liabilities relate to the same tax authorities.
The expense for income taxes incurred are computed based on tax laws approved in Mexico at the date of the consolidated statement of financial position.
Current IT is made up of IT, which is recorded under income for the year in which it is incurred. The tax is based on taxable income.
To determine the IT the applicable rate in Mexico for 2017 and 2016 was 30%. The applicable rate for Airplan, according to Colombian legislation for 2017 was 34% and the applicable rate for Aerostar, in accordance with Puerto Rico law for 2017 was 10%.
