INCOME TAXES
 12 Months Ended
Dec. 31, 2021
Disclosure Of Income Taxes [Abstract]  
INCOME TAXES [Text Block]

23. INCOME TAXES

(a) Tax Assessments

Minera Santa Cruz y Garibaldi SA de CV ("MSCG"), a subsidiary of the Company, received a MXN 238 million assessment on October 12, 2010 by Mexican fiscal authorities for failure to provide the appropriate support for certain expense deductions taken in MSCG's 2006 tax return, failure to provide appropriate support for loans made to MSCG from affiliated companies, and deemed an unrecorded distribution of dividends to shareholders, among other individually immaterial items. MSCG immediately initiated a Nullity action and filed an administrative attachment to dispute the assessment.

 

In June 2015, the Superior Court ruled in favour of MSCG on a number of the matters under appeal; however, the Superior Court ruled against MSCG for failure to provide appropriate support for certain deductions taken in MSCG's 2006 tax return. In June 2016, the Company received an MXN 122.9 million ($6,000) tax assessment based on the June 2015 ruling. The 2016 tax assessment comprised of MXN 41.8 million owed ($2,000) in taxes, MXN 17.7 million ($900) in inflationary charges, MXN 40.4 million ($2,000) in interest and MXN 23.0 million ($1,100) in penalties. The 2016 tax assessment was issued for failure to provide the appropriate support for certain expense deductions taken in MSCG's 2006 tax return and failure to provide appropriate support for loans made to MSCG from affiliated companies. The MXN 122.9 million assessment includes interest and penalties. If MSCG agrees to pay the tax assessment, or a lesser settled amount, it is eligible to apply for forgiveness of 100% of the penalties and 50% of the interest.

 

The Company filed an appeal against the June 2016 tax assessment on the basis certain items rejected by the courts were included in the new tax assessment, and a number of deficiencies exist within the assessment. Since issuance of the assessment interest charges of MXN 12.8 million ($600) and inflationary charges of MXN 19.1 million ($900) have accumulated.

Included in the Company's consolidated financial statements are net assets of $595 held by MSCG. Following the Tax Court's rulings, MSCG is in discussions with the tax authorities with regards to the shortfall of assets within MSCG to settle its estimated tax liability. An alternative settlement option would be to transfer the shares and assets of MSCG to the tax authorities. As of December 31, 2021, the Company's income tax payable includes an allowance for transferring the shares and assets of MSCG amounting to $595. The Company is currently assessing MSCG's settlement options based on ongoing court proceedings and discussion with the tax authorities. The Company has been advised that the appeal filed with the Federal Tax Court, against the June 2016 tax assessment has been rejected and the Company continues to assess MSCG's settlement options and has filed an appeal with the Supreme Court of Justice.

Compania Minera Del Cubo SA de CV ("Cubo"), a subsidiary of the Company, received a MXN 58.5 million ($2,900) assessment in 2019 by Mexican fiscal authorities for alleged failure to provide the appropriate support for depreciation deductions taken in the Cubo 2016 tax return and denied eligibility of deductions of certain suppliers. The tax assessment consists of MXN 24.1 million ($1,200) for taxes, MXN 21.0 million ($1,100) for penalties, MXN 10.4 million ($500) for interest and MXN 3.0 million ($100) for inflation. At the time of the tax assessment the Cubo entity had and continues to have sufficient loss carry forwards which would be applied against the assessed difference of taxable income. The Mexican tax authorities did not consider these losses in the assessment.

Due to the denial of certain suppliers for income tax purposes in the Cubo assessment, the invoices from these suppliers have been assessed as ineligible for refunds of IVA paid on the invoices. The assessment includes MXN 14.7 million ($600) for re-payment of IVA (value added taxes) refunded on these supplier payments. In the Company's judgement the suppliers and invoices meet the necessary requirements to be deductible for income tax purposes and the recovery of IVA.

The Company has filed an administrative appeal related to the 2016 Cubo Tax assessment. The Company had previously provided a lien on certain El Cubo mining concessions during the appeal process. To facilitate the sale of the El Cubo mine and related assets, the Company elected to pay the assessed amount of $3.5 million during Q1, 2021. During the appeal process the amount paid has been classified as a non-current income tax recoverable. Since issuance of the assessment interest charges of MXN 9.9 million ($500) and inflationary charges of MXN 1.6 million ($100) had accumulated. The Company continues to assess that it is probable that its appeal will prevail, and no provision is recognized in respect of the Cubo tax assessment.

Deferred Income Tax Assets and Liabilities


Mexico operations   December 31,     December 31,  
Deferred tax derived from income tax   2021     2020  
             
Deferred income tax assets:            
   Tax loss carryforwards $ 8,893   $ 18,412  
   Working capital   11,287     2,354  
Deferred income tax liabilities:            
   Inventories   (7,146 )   (1,875 )
   Mineral properties, plant and equipment   (12,177 )   (6,138 )
Deferred income tax assets (liabilities), net $ 857   $ 12,753  
             
Mexico operations   December 31,     December 31,  
Deferred tax derived from special mining duty   2021     2020  
             
Deferred income tax liabilities:            
   Working capital $ 510   $ (230 )
   Mineral properties, plant and equipment   (1,937 )   (624 )
   Other   -     (223 )
Deferred income tax assets (liabilities), net $ (1,427 ) $ (1,077 )

(b) Income Tax Expense

    Years ended  
    December 31,     December 31,  
    2021     2020  
             
Current income tax expense (recovery):            
   Current income tax expense in respect of current year $ 754   $ 1,053  
   Special mining duty   2,726     1,989  
   Adjustments recognized in the current year in relation to prior years   -     (49 )
Deferred income tax expense (recovery):            
   Deferred tax expense recognized in the current year   19,641     5,498  
   Special mining duty   574     1,646  
   Adjustments recognized in the current year in relation to prior years   (7,962 )   (12,350 )
Total income tax expense (recovery) $ 15,733   $ (2,213 )

The reconciliation of the income tax provision computed at statutory tax rates to the reported income tax provision is as follows:

    December 31,     December 31,  
    2021     2020  
             
Canadian statutory tax rates   27.00%     27.00%  
Income tax expense computed at Canadian statutory rates $ 8,015   $ (284 )
Foreign tax rates different from statutory rate   986     256  
Withholding taxes, net of tax credits   -     9  
Stock-based compensation   545     478  
Foreign exchange   2,279     (153 )
Inflationary adjustment   4,836     755  
Other non-deductible item   1,375     1,451  
Adjustments recognized in the current year in relation to prior years   (468 )   92  
Current year losses not recognized   2,456     3,990  
Special mining duty Mexican tax   3,203     3,634  
Recognition of previously unrecognized losses   (7,494 )   (12,441 )
Income tax expense $ 15,733   $ (2,213 )

(c) Unrecognized Deferred Tax Assets

Management believes that sufficient uncertainty exists regarding the realization of certain deferred tax assets such that they have not been fully recognized. The tax benefits not recognized reflect management's assessment regarding the future realization of Canadian, Chilean and certain Mexican tax assets and estimates of future earnings and taxable income in these jurisdictions as of December 31, 2021. When circumstances cause a change in management's judgement about the recoverability of deferred tax assets, the impact of the change will be reflected in current income.

  Loss Carry Forward   December 31,     December 31,  
  Expiry   2021     2020  
               
Unrecognized Mexico tax loss carry forward 2022-2031 $ 118,810   $ 129,680  
Unrecognized Canada tax loss carry forward 2025-2031   7,525     6,752  
Unrecognized Chile tax loss carry forward 2022-2031   16,403     13,817  
Capital losses     9,650     12,561  
Reclamation provision     7,396     8,876  
Exploration pools     13,569     6,172  
Other Canada temporary differences     13,069     13,918