5.1.1 Deferred income tax

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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.

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from 1 January 2021
to 31 December 2021		 from 1 January 2020
to 31 December 2020
Deferred net income tax at the beginning of the period, of which: (249) (288)
Deferred tax assets 193 157
Deferred tax liabilities (442) (445)
Deferred income tax during the period: (209) 39
Recognised in profit or loss (124) (191)
Recognised in other comprehensive income (62) 226
Exchange differences from translation of statements of operations with a functional currency other than PLN (23) 4
Deferred net income tax at the end of the period, of which: (458) (249)
Deferred tax assets 185 193
Deferred tax liabilities (643) (442)

Maturities of deferred tax assets and deferred tax liabilities were as follows

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Deferred tax assets Deferred tax liabilities

As at
31 December 2021

 As at
31 December 2020		 As at
31 December 2021		 As at
31 December 2020
Maturity over the 12 months from the end of the reporting period 86 101 (996) (791)
Maturity of up to 12 months from the end of the reporting period 99 92 353 349
Total 185 193 (643) (442)

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

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As at 31 December 2021 As at 31 December 202
Unused tax losses Expiry date Unused tax credits Expiry date Unused tax losses Expiry date

Unused tax credits
Luxembourg 333 indefinite – 2 442 indefinite –
1 359 2034-2037 1 282 2034-2037 – –
Chile 1 056 indefinite – 975 indefinite –
Canada 1 443 2026-2040 42 2030-2039 1 127 2026-2039 43 2030-2039
Other 17 2025 – – 135 2021-2037 – –
Total 4 208 42 5 961 43

As at 31 December 2021,  the amount of deductible temporary differences in respect of which the Group did not recognise a deferred tax asset amounted to PLN 2 704 million (as at 31 December 2020: PLN 2 575 million).

As at 31 December 2021, 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 962 million (as at 31 December 2020: PLN 806 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.

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Deferred tax assets (deferred tax assets prior to offsetting with deferred tax liabilities at the level of individual companies of the Group)
As at
31 December 2019		 Credited/(Charged) As at
31 December 2020		 Credited/(Charged) As at
31 December 2021
profit or loss other comprehensive income exchange differences from translation of statements of operations with a functional currency other than PLN profit or loss other comprehensive income exchange differences from translation of statements of operations with a functional currency other than PLN
Provision for decommissioning of mines and other technological facilities 240 13 – – 253 (63) – 1 191
Measurement of forward transaction other than hedging instruments 21 15 – – 36 35 – – 71
Difference between the depreciation rates of property, plant and equipment for accounting and tax purposes 67 26 – – 93 (5) – – 88
Future employee benefits 525 13 62 – 600 (3) (132) – 465
Equity instruments measured at fair value 140 – (36) – 104 – – – 104
Lease liabilities 63 (2) – – 61 14 – 75
Interest 157 43 – (3) 197 24 – 14 235
Recognition/reversal of impairment losses on assets 31 13 – – 44 (41) – – 3
Short-term accruals for remuneration 72 24 – – 96 17 – – 113
Re-measurement of hedging instruments 35 – 200 – 235 – 70 – 305
Liabilities related to fixed fee due to setting mining usufruct 31 (1) – – 30 5 – – 35
Employee benefits (holidays) 11 2 – – 13 – – – 13
Unpaid remuneration with surcharges 24 – – – 24 – – – 24
Other 219 (8) – – 211 58 – 269
Total 1 636 138 226 (3) 1 997 41 (62) 15 1 991
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Deferred tax liabilities (deferred tax liabilities prior to offsetting with deferred tax assets at the level of individual companies of the Group)
As at
31 December 2019		 Credited/(Charged) As at
31 December 2020		 Credited/(Charged) As at
31 December 2021
profit or loss exchange differences from translation of statements of operations with a functional currency other than PLN profit or loss exchange differences from translation of statements of operations with a functional currency other than PLN
Measurement of forward transactions other than hedging instruments 17 18 – 35 15 – 50
Difference between the depreciation rates for accounting and tax purposes, including: 1 411 106 (3) 1 514 122 23 1 659
related to depreciation of right-to-use assets (IFRS 16) 65 (5) – 60 11 – 71
Accrued interest 361 113 (4) 470 17 17 504
Other 135 92 – 227 11 (2) 236
Total 1 924 329 (7) 2 246 165 38 2 449
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5.1 Income tax in the consolidated statement of profit or loss
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5.2 Other taxes and charges

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