Annual and transition report of foreign private issuers pursuant to Section 13 or 15(d)

8. Deferred Taxes

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8. Deferred Taxes
12 Months Ended
Dec. 31, 2017
Deferred Taxes  
Deferred Taxes

Note 8 — Deferred Taxes

 

The amount of unused tax losses for which no deferred tax assets are recognized in the consolidated statements of financial position as of December 31, 2017, 2016 and 2015 was $41,632, $542,357 and $935,866, respectively, with no expiration date limitation.

 

Deferred tax is calculated in full on temporary differences using a tax rate of 24%, 24% and 27.5% for the years ended December 31, 2017, 2016 and 2015, respectively, if the temporary difference is subject only to IRES (an Italian corporate income tax) rules, or 27.9%, 27.9% and 31.4% for the years ended December 31, 2017, 2016 and 2015, respectively, if the temporary difference is subject both to IRES and IRAP (an Italian regional production tax) rules.

 

The new Italian legislation amended the IRES rates from 27.5% to 24% in 2017 to be used for the income tax calculation of accounting periods ending in the year 2017 and 2016.

 

The movement on the deferred tax account is as shown below:

 

    2017     2016     2015  
At January 1   $ (2,557,571 )   $ (2,764,734 )   $ (3,738,082 )
                         
Recognized directly in equity                        
Sale of SIM (see note 9 — Discontinued Operations)                 315,325  
Sale of Nova (see note 9 — Discontinued Operations)     206,679              
Currency exchange difference     (383,555     71,026       370,358  
                         
Recognized in profit and loss                        
Deferred tax benefit/(expense)     (15,867)       136,137       287,665  
At December 31,   $ (2,750,314 )   $ (2,557,571 )   $ (2,764,734 )

  

Details of the deferred tax liability and amounts recognized in net income/(loss) are as follows:

 

    2017     2017     2017     2017  
    Asset     Liability     (Charged) /
Net
    Movement  
Adjustment for IFRS purposes (deductible/taxable for local tax rules in future fiscal years)                                
Writing off of intangibles   $ 507,880     $     $ 507,880     $ 59,767  
Writing off of tangibles           (48,009 )     (48,009 )     11,164  
Accounting of lease contracts according to IAS 17           (1,997,805 )     (1,997,805 )     191,956  
Accounting of investment properties according to fair value           (948,648 )     (948,648 )     (225,124 )
Loss on investments (internal restructuring)           (263,732 )     (263,732      
Other temporary differences                                
Bad debt provision                       2,780  
Others                       (24,676 )
Total   $ 507,880     $ (3,258,194 )   $ (2,750,314 )   $ 15,867  

 

    2016     2016     2016     2016*  
    Asset     Liabilities     (Charged) /
Net
    Movement  
Adjustment for IFRS purposes (deductible/taxable for local tax rules in future fiscal years)                                
Writing off of intangibles   $ 501,880     $     $ 501,880     $ 97,213  
Writing off of tangibles           (149,164 )     (149,164 )     8,424  
Accounting of lease contracts according to IAS 17           (1,574,288 )     (1,574,289 )     14,091  
Accounting of investment properties according to fair value           (1,107,110 )     (1,107,110 )     (272,437 )
Mark to market on derivative instruments                       53,034  
Loss on investments (internal restructuring)           (231,484 )     (231,484 )     (30,470 )
Other temporary differences                                
Bad debt provision     2,596             2,596       397  
Provision for risk                       217  
Others                       (775 )
Total   $ 504,476     $ (3,062,046 )   $ (2,557,571 )   $ (130,306 )

 

 

    2015     2015     2015     2015*  
    Asset     Liabilities     (Charged) / Net     Movement  
Adjustment for IFRS purposes (deductible/taxable for local tax rules in future fiscal years)                                
Writing off of intangibles   $ 611,712     $     $ 611,712     $ 48,844  
Writing off of tangibles           (120,387 )     (120,387 )     12,234  
Accounting of lease contracts according to IAS 17           (1,606,270 )     (1,606,270 )     253,125  
Accounting of investment properties according to fair value           (1,436,973 )     (1,436,973 )     (481,360 )
Mark to market on derivative instruments     52,013             52,013       10,537  
Loss on investments (internal restructuring)           (268,103 )     (268,103 )     273,955  
Other temporary differences                                
Bad debt provision     3,061             3,061       5,538  
Others     213             213       (487 )
Total   $ 666,999     $ (3,431,733 )   $ (2,764,734 )   $ (122,386 )

 

*Restated for discontinued operations (see note 9 — Discontinued Operations)