Is Largo not subjected to an effective tax rate of 6.25%? From the official Technical Report / Pre-feasibility Study filed in Dec 2021:
National Income Tax / Imposto de Renda - IR
A 15% tax rate on pre-tax profit, based on real profit, is applied if the profit is less than R$ 240,000/year. A rate of 25% on pre-tax profit is applied if the profit is greater than R$ 240,000/ year. The Maracs Menchen Mine has been granted a reduction of 75% of this income tax based on a SUDENE resolution, the details of which are provided below, resulting in an effective tax rate of 6.25%. This reduction of 75% in the income tax was extended by Brazilian Federal government until 2028. The Discounted Cash Flow considered this benefit until 2028.
The following table illustrates the relationship between the Income Tax / Deferred Expense
and the Net Income before tax. The pattern is all over the place. It’s hard to understand
US$
| | 1 | 2 | 3 | 4 | 5 | 6 |
| Period | Net Income (Loss) before Tax | Income Tax Expense | Deferred Income Tax (Expense) / Recovery | Total Income Tax / Deferred Expense | Net Income (Loss) after Tax | % Tax (col 4 / col 1) |
| FY 2018 | 322.7M | (27.5M) | 20.8M | (6.7M) | 316M | 2% |
| FY 2019 | (23.5M) | (0.9M) | (2.6M) | (3.5M) | (27M) | Tax on an income loss? Perhaps due to a prior year adjustment |
| FY 2020 | 7.7M | (0.1M) | (0.8M) | (0.9M) | 6.8M | 12% |
| FY2021 | 31.8M | (5.4M) | (3.8M) | (9.2M) | 22.6M | 29% |
| FY2022 | 4.0M | (7.7M) | 1.4M | (6.2M) | (2.2M) | 155% |
| Q1-23 | 0.7M | (0.3M) | (1.6M) | (1.9M) | (1.2M) | 271% |
DYODD