| INCOME TAX AND DEFERRED INCOME TAX ASSETS/LIABILITIES |
NOTE 8 – INCOME TAX AND DEFERRED INCOME TAX ASSETS/LIABILITIES Movements in income tax liabilities are as follows: | | | | | | | September 30, | | | 2025 | | 2024 | At the beginning of the year | | (5,562) | | (4,149) | Current income tax expense | | (145,789) | | (28,975) | Acquisitions through business combination (*) | | — | | (1,098) | Payments | | 10,892 | | 8,764 | RECPAM and currency translation adjustments | | 30,471 | | 1,609 | Income tax withholdings and offset tax credit | | 69,288 | | 21,002 | At the end of the period | | (40,700) | | (2,847) |
Movements in Deferred Income tax assets/(liabilities), net are as follows: | | | | | | | September 30, | | | 2025 | | 2024 | At the beginning of the year | | (1,680,382) | | (1,188,088) | Increases in Deferred tax | | 210,198 | | (527,162) | Currency translation adjustments | | 1,309 | | (7,006) | Other comprehensive income | | (1,079) | | 2,409 | Acquisitions through business combination (*) | | 365,887 | | (47) | At the end of the period | | (1,104,067) | | (1,719,894) | | | | | | Net deferred tax assets | | 375,054 | | 35,798 | Net deferred tax liabilities | | (1,479,121) | | (1,755,692) |
(*) See Note 16. As of September 30, 2025, Telecom and some subsidiaries have cumulative tax loss carryforwards of $153,428 million, that represents a deferred tax asset of $53,343 million. Income tax expense differed from the amounts computed by applying the statutory income tax rate of each company to pre-tax income as a result of the following: | | | | | | | | September 30, | | | | 2025 | | 2024 | | | | | Profit (loss) | | Income before income tax | | (336,952) | | 1,810,350 | | Non-taxable items – Earnings (Losses) from associates and joint ventures | | 4,073 | | 10,783 | | Non-taxable items – Other | | (6,375) | | 5,837 | | Restatement in current currency of Equity, goodwill and other | | 653,847 | | 1,159,130 | | Subtotal | | 314,593 | | 2,986,100 | | Average statutory income tax rate | | 30.83 | % | 34.48 | % | Income tax expense at statutory tax rate of each company | | (97,003) | | (1,029,552) | | Deferred tax liability restatement in current currency and other | | 471,843 | | 1,506,339 | | Income tax inflation adjustment | | (299,279) | | (1,029,111) | | Income tax on cash dividends of foreign companies | | (11,152) | | (3,813) | | Income tax benefit (expense) (*) | | 64,409 | | (556,137) | | | | | | | | Current tax | | (145,789) | | (28,975) | | Deferred tax | | 210,198 | | (527,162) | | Income tax benefit (expense) | | 64,409 | | (556,137) | |
(*)Includes $(972) million and $3,572 million for the nine-month periods ended September 30, 2025 and 2024, respectively, corresponding to adjustments made in the respective 2024 and 2023 tax returns. It also includes $282 million for the nine-month period ended September 30, 2024, related to a creditable withholding originated in the subsidiary MFH, which is not an income tax liable entity.
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