5.1.1 Deferred income tax
in PLN millions, unless otherwise stated
Deferred income tax is determined using tax rates and tax laws that are expected to be applicable when the asset is realised or the liability is settled based on tax rates and tax laws that have been enacted or substantively enacted at the end of the reporting period.
Deferred tax liabilities and deferred tax assets are recognised for temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements, with the exception of temporary differences arising from initial recognition of assets or liabilities in transactions other than business combinations, which do not have an impact either on profit/(loss) before tax or on the taxable profit/(tax loss) at the moment they are concluded.
Deferred tax assets are recognised if it is probable that taxable profit will be available against which the deductible temporary differences and unused tax losses can be utilised.
Deferred tax assets and deferred tax liabilities are offset
if the company has a legally enforceable right to set off current tax assets and current tax liabilities, and if the deferred tax assets and deferred tax liabilities relate to income taxes levied on a given entity by the same tax authority.
The assessment of probability of realising deferred tax assets with future tax income is based on the budgets of the companies of the Group. Companies of the Group recognised deferred tax assets in their accounting books to the extent that it is probable that taxable profit will be available against which the deductible temporary differences can be utilised. Companies of the Group which historically have generated losses, and whose financial projections
do not foresee the achievement of taxable profit enabling the deduction of deductible temporary differences, do not recognise deferred tax assets
in their accounting books.
| from 1 January 2022 to 31 December 2022 | from 1 January 2021 to 31 December 2021 | |
| Deferred net income tax at the beginning of the period, of which: | (458) | (249) |
| Deferred tax assets | 185 | 193 |
| Deferred tax liabilities | (643) | (442) |
| Deferred income tax during the period: | (533) | (186) |
| Recognised in profit or loss | (315) | (124) |
| Recognised in other comprehensive income | (218) | (62) |
| Exchange differences from translation of balances of deferred tax assets of statements of operations with a functional currency other than PLN | (23) | (23) |
| Deferred net income tax at the end of the period, of which: | (1 014) | (458) |
| Deferred tax assets | 137 | 185 |
| Deferred tax liabilities | (1 151) | (643) |
Maturities of deferred tax assets and deferred tax liabilities were as follows:
| Deferred tax assets | Deferred tax liabilities | |||
|---|---|---|---|---|
| As at 31 December 2022 |
As at 31 December 2021 |
As at 31 December 2022 |
As at 31 December 2021 |
|
| Maturity over the 12 months from the end of the reporting period | 31 | 86 | (1 238) | (996) |
| Maturity of up to 12 months from the end of the reporting period | 106 | 99 | 87 | 353 |
| Total | 137 | 185 | (1 151) | (643) |
Expiry dates of unused tax losses and tax credits, for which deferred tax assets were not recognised in individual countries, are presented in the following table:
| As at 31 December 2022 |
As at 31 December 2021 |
|||||||
| Unused tax losses | Expiry date | Unused tax credits | Expiry date | Unused tax losses | Expiry date | Unused tax credits | Expiry date | |
| Luxembourg | 158 | indefinite | – | – | 333 | indefinite | – | – |
| 520 | 2036-2037 | – | – | 1 359 | 2034-2037 | – | – | |
| Chile | 91 | indefinite | – | – | 1 056 | indefinite | – | – |
| Canada | 1 602 | 2026-2042 | 60 | 2030-2039 | 1 443 | 2026-2040 | 42 | 2030-2039 |
| Other | 16 | 2025 | – | – | 17 | 2025 | – | – |
| Total | 2 387 | 60 | 4 208 | 42 | ||||
As at 31 December 2022, the Group did not recognise a deferred tax asset on deductible temporary differences in the amount of PLN 3 022 million (as at 31 December 2021: PLN 2 704 million) because there is low possibility that they will be reversed in the foreseeable future and that taxable income, on which it could be recognised, will be achieved.
As at 31 December 2022, at the level of the consolidated financial statements, there was no recognition of deferred tax liabilities on taxable temporary differences in the amount of PLN 1 076 million (as at 31 December 2021: PLN 962 million) related to investments in subsidiaries and shares in joint ventures, as the conditions stipulated in IAS 12.39 were met.
The following tables present deferred income tax assets and liabilities before their compensation at the level of individual companies of the Group.
| As at 31 December 2020 |
Credited/(Charged) | As at 31 December 2021 |
Credited/(Charged) | As at 31 December 2022 |
||||||
| profit or loss | other comprehensive income | exchange differences from translation of balances of deferred tax assets of statements of operations with a functional currency other than PLN | profit or loss | other comprehensive income | exchange differences from translation of balances of deferred tax assets of statements of operations with a functional currency other than PLN | changes due to loss of control of subsidiaries | ||||
| Provision for decommissioning of mines and other technological facilities | 253 | (63) | – | 1 | 191 | 1 | – | 2 | – | 194 |
| Measurement of forward transactions other than hedging instruments | 36 | 35 | – | – | 71 | (27) | – | – | – | 44 |
| Difference between the depreciation rates of property, plant and equipment for accounting and tax purposes | 93 | (5) | – | – | 88 | 7 | – | – | – | 95 |
| Future employee benefits | 600 | (3) | (132) | – | 465 | – | 80 | – | – | 545 |
| Equity instruments measured at fair value | 104 | – | – | – | 104 | – | 19 | – | – | 123 |
| Lease liabilities | 61 | 14 | – | – | 75 | 19 | – | – | 94 | |
| Accrued and unpaid interest on borrowings | 197 | 24 | – | 14 | 235 | 45 | – | 17 | – | 297 |
| Recognition/reversal of impairment losses on assets | 83 | (25) | – | – | 58 | (17) | – | – | (1) | 40 |
| Short-term accruals for remuneration | 96 | 17 | – | – | 113 | 12 | – | – | – | 125 |
| Re-measurement of hedging instruments | 235 | – | 70 | – | 305 | – | (292) | – | – | 13 |
| Liabilities related to fixed fee due to setting mining usufruct | 30 | 5 | – | – | 35 | – | – | – | – | 35 |
| Employee benefits (holidays) | 13 | – | – | – | 13 | – | – | – | – | 13 |
| Unpaid remuneration with surcharges | 24 | – | – | – | 24 | 3 | – | – | – | 27 |
| Other | 172 | 42 | – | – | 214 | (11) | – | (4) | 199 | |
| Total | 1 997 | 41 | (62) | 15 | 1 991 | 32 | (193) | 19 | (5) | 1 844 |
| As at 31 December 2020 |
(Credited)/Charged | As at 31 December 2021 |
(Credited)/Charged | As at 31 December 2022 |
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| profit or loss | exchange differences from translation of balances of deferred tax assets of statements of operations with a functional currency other than PLN | profit or loss | other comprehensive income | exchange differences from translation of balances of deferred tax assets of statements of operations with a functional currency other than PLN | changes due to loss of control of subsidiaries | ||||
| Measurement of forward transactions other than hedging instruments | 35 | 15 | – | 50 | (9) | – | – | – | 41 |
| Difference between the depreciation rates for accounting and tax purposes, including: | 1 514 | 122 | 23 | 1 659 | 159 | – | 26 | (4) | 1 840 |
| related to depreciation of right-to-use assets | 60 | 11 | – | 71 | 18 | – | – | – | 89 |
| Accrued and unpaid interest on loans | 470 | 17 | 17 | 504 | 119 | – | 20 | – | 643 |
| Re-measurement of hedging instruments | – | – | – | – | – | 25 | – | – | 25 |
| Equity instruments measured at fair value | 37 | 54 | – | 91 | (7) | – | – | – | 84 |
| Other | 190 | (43) | (2) | 145 | 85 | – | (4) | (1) | 225 |
| Total | 2 246 | 165 | 38 | 2 449 | 347 | 25 | 42 | (5) | 2 858 |