21	Income tax and tax loss carryforwards

Income Tax

Results for the year

Grupo TMM and Subsidiaries incurred combined tax losses for the years ended December 2020 and 2019, in the amounts of $(383,647) and $(397,746), respectively. Most of the companies that generated taxable income fully offset them against tax losses from prior years. Income tax recognized in profit or loss corresponds to subsidiaries that generated taxable income of $36,243 and $48,373, respectively.

The difference between taxable and book income is due primarily to the net effect of the gain or loss on inflation recognized for tax purposes, the difference between tax and book amortization and depreciation, non-deductible expenses, as well as certain temporary differences reported in different periods for financial and tax purposes.

In accordance with the currently enacted Income Tax Law, the rate for 2018, 2019, 2020, and subsequent years is 30%.

The provision for income tax recognized in the statement of profit or loss for the years ended December 31, 2020, 2019 and 2018, is as follows:

	2020			2019			2018
Income tax	$	(10,873	)	$	(14,512	)	$	(4,799	)
Income tax (agreement) (a)		-			(85,196	)		-
Deferred income tax		30,207			35,133			-
Total income tax expense	$	19,334		$	(64,575	)	$	(4,799	)

(a)

During 2019, Grupo TMM agreed with the Tax Administration Service to resolve the Company’s outstanding tax liabilities for the fiscal year 2010 through payment of 2.6 million pesos over a period of 36 months beginning in November 2019.

The reconciliation between the provision for income tax based on the statutory income tax rate and the provision recorded by the Company at December 31, 2020, 2019 and 2018, is as follows:

	2020			2019			2018
(Loss) profit before taxes	$	(422,490	)	$	95,867		$	28,348
Income tax		126,747			(28,760	)		(8,504	)
Increase (decrease) from:
Difference in depreciation and amortization		(86,033	)		(180,395	)		(56,356	)
Revaluation surplus		94,331			113,826			(48,424	)
Income recognized in advance		-			-			(62	)
Materials and supplies		3,625			(31,073	)		(19,888	)
Inflationary and currency exchange effects on monetary assets and liabilities, net		(4,035	)		1,236			(26,686	)
Tax losses – net		12,054			19,277			206,485
Provisions and allowance for doubtful accounts		(78,527	)		54,214			(44,609	)
Forgiveness of accounts receivable		(29,658	)		-			-
Difference between the tax and book value for the sale of assets		(14,276	)		(13,133	)		(15,551	)
Difference between the tax and book value for the sale of shares of subsidiaries		(104	)		97,284			20,800
Non-deductible expenses		(4,790	)		(11,855	)		(12,004	)
Income tax (agreement)		-			(85,196	)		-
Benefit (provision) for income tax	$	19,334		$	(64,575	)	$	(4,799	)

The components of deferred tax liability at December 31, 2020 and 2019, are comprised as follows:

	2020			2019
Portion of tax loss carryforwards for subsequent years	$	350,272		$	338,218
Inventories and provisions – net		41,080			51,657
Concession rights and property, vessels and equipment		(706,976	)		(638,089	)
Total deferred tax liability	$	(315,624	)	$	(248,214	)

As of December 31, 2020, the Company’s Management carried out the evaluation of the amount of tax losses that will be recoverable and determined based on projections that the effect of the deferred tax asset determined in the year will be realized at 51% based on the information available at the date of issuance of the consolidated financial statements.

Tax loss carryforwards

As of December 31, 2020, Grupo TMM and its subsidiaries, report the following cumulative tax losses, which are restated applying the National Consumer Price Index (NCPI) factors in accordance with Mexican law.

Year in which the loss was incurrred	Amounts		Year of expiration
2011	$	66,483		2021
2012		168,689		2022
2013		199,466		2023
2014		142,463		2024
2015		69,170		2025
2016		410,181		2026
2017		103,125		2027
2018		216,620		2028
2019		491,902		2029
2020		434,618		2030
	$	2,302,717