Annual Report 2009 - Isagen

ANNUAL REPORT 2009 / ISAGEN S.A. E.S.P.111Tax Law AmendmentTax amendment Law 1370 of December 30 of 2009 contains issuesthat directly affect ISAGEN, as follows:The equity tax is established for year 2011, to be fully recorded andcalculated in 2011. It shall be paid in eight equal installments between2011 and 2014, and can be recorded against the equity revaluationaccount, that is without affecting the results of the year.Starting 2010, deduction for real productive fixed assets will be30% and not 40%, as was the rule.Following is the calculation of income tax as of December 31:2009 2008Earnings before income tax provision 524,609 363,713Plus non-deductible expenses and taxable revenues:Loss on the sale of real property 331 361Provisions 296 158Non-deductible taxes 1,478 6,379Levy on financial transactions - 2,521Other non-deductible expenses 13,571 4,762Revenues from investment valuation 1,112 -Presumptive interest 325 -Less non-taxable revenues and deductible expenses :Recovery non-taxable revenues 6,744 2,235Deductible provisions 1,825 80Bigger tax depreciation expense 128,247 133,863Inflation adjustment in retirement of inventories 1,483 343Productive real fixed assets deduction 86,521 30,897Taxable income 316,902 210,476Tax rate 33% 33%Current income tax 104,578 69,457Withholding tax and credit balances (41,301) (39,749)Tax discount (1,637) -61,640 29,708Charges to the income statement for income tax are detailed below:2009 2008Current income tax 104,578 69,457Deferred tax payable 32,599 33,927Deferred tax receivable 1,681 8138,858 103,392Reconciliation between per-books and taxable equity at December 31:2009 2008Accounting equity 3,344,153 3,132,491Plus:Allowance for protection of inventories, receivables,40,032 47,965investments, and property, plant and equipmentCredit deferred tax 252,609 220,010Fixed assets equity difference 232,788 234,985Less:Debit deferred tax 7,326 9,007Deferred depreciation 936,995 808,899Reappraisals 1,035,410 1,037,219Fiscal equity 1,889,851 1,780,326The income tax return for 2008 is subject to the review and approvalby the tax authorities. The Company’s management and its legalcounsels consider that no differences will arise in this respect.Management considers that the amount recorded as tax provision isenough to cover any liability that may arise with respect to 2009.Income tax returns for 2009 shall be filed by April 13, 2010.Contents Letter from the CEO Achievements2009Good GovernancePractices EvaluationCorporateManagementFinancial Management