Income tax

12 Months Ended

Dec. 31, 2025

20. Income tax

a) In accordance with the MITL, the Company and its Mexican subsidiaries are subject to income tax and each files its tax returns on an individual entity basis and the related tax results are included in the accompanying consolidated financial statements. The income tax is computed taking into consideration the taxable and deductible effects of inflation, such as depreciation calculated on adjusted assets values. Taxable income is increased or reduced by the effects of inflation on certain monetary assets and liabilities through the annual inflation adjustment.

(i)

Based on the approved law, corporate income tax current rate for 2025, 2024 and 2023 and thereafter is 30%.

(ii)

The tax rules include limits in the deductions of the exempt compensation amount certain items, as follows: Wages and benefits paid to workers 47% of income paid to workers and in certain cases up to 53% (holiday bonus, savings fund, employee profit sharing, seniority premiums) will be deductible for employers. As a result, certain wage and salary provisions have difference between tax and book values at year-end.

(iii)

The MITL sets forth criteria and limits for applying some deductions, such as: the deduction of payments which, in turn, are exempt income for workers, contributions for creating or increasing provisions for pension funds, contributions to the Mexican Institute of Social Security payable by the worker that are paid by the employer, as well as the possible non-deduction of payments made to related parties in the event of failing to meet certain requirements.

(iv)

Taxable income for purposes of the employee profit sharing is the same used for the Corporate Income Tax except for certain items.

(v)

A 10% withholding tax is imposed on dividends distributions to individuals and foreign shareholders from earnings generated starting January 1, 2014.

The income tax rates for 2025, 2024 and 2023 were in Guatemala 25%, Costa Rica 30% and El Salvador 30%.

b) For the years ended December 31, 2025, 2024 and 2023, the Company reported on a consolidated basis taxable income of US$219,112, US$299,332 and US$59,984, respectively, which was partially offset by tax losses from prior years.

In accordance with the MITL and Costa Rican Income Tax Law (CRITL), tax losses may be carried forward against taxable income generated in the succeeding ten and three years, respectively. Carryforward tax losses are adjusted based on inflation.

In accordance with Guatemala Income Tax Law (GITL) and El Salvador Income Tax Law (ESITL), tax losses cannot be carried forward against taxable income generated.

c) An analysis of consolidated income tax expense for the years ended December 31, 2025, 2024 and 2023 is as follows:

Consolidated statements of operations


	2025				2024				2023
Current income tax expense		US$	(65,288	)		US$	(104,184	)		US$	(21,939	)
Deferred income tax benefit			79,664				47,870				22,316
Total income tax benefit (expense)		US$	14,376			US$	(56,314	)		US$	377

Consolidated statements of comprehensive income


	2025				2024			2023
Deferred income tax related to items recognized in OCI during the year
(Loss) gain on derivate financial instruments		US$	(124	)		US$	118		US$	362
Benefit from remeasurement of employee benefits			382				39			32
Benefit deferred income tax recognized in OCI		US$	258			US$	157		US$	394

d) A reconciliation of the statutory corporate income tax rate to the Company’s effective tax rate for financial reporting purposes is as follows:

The Company’s effective income tax reconciliation using domestic tax rate


	2025				%			2024				%			2023				%
Statutory income tax rate		US$	(35,474	)		30.00	%		US$	54,806			30.00	%		US$	2,233			30.00	%
Amendment tax return effects and other tax adjustments			(521	)		0.44	%			(17,467	)		(9.56	%)			7,074			95.05	%
Inflation on furniture, intangible and equipment			623			(0.53	%)			(938	)		(0.51	%)			(1,370	)		(18.41	%)
Inflation of tax losses			165			(0.14	%)			(463	)		(0.25	%)			(6,734	)		(90.48	%)
Foreign countries difference with Mexican statutory rate			(9	)		0.01	%			(18	)		(0.01	%)			21			0.28	%
Annual inflation adjustment			(3,036	)		2.57	%			(5,304	)		(2.90	%)			(3,262	)		(43.83	%)
Effect unrecognized NOLs			(892	)		0.75	%			186			0.10	%			3,030			40.71	%
Non-deductible expenses			7,391			(6.25	%)			16,728			9.16	%			26,132			351.15	%
Difference in foreign exchange losses for tax purposes			17,377			(14.69	%)			8,784			4.80	%			(27,501	)		(369.53	%)
		US$	(14,376	)		12.16	%		US$	56,314			30.83	%		US$	(377	)		(5.06	%)

Mexican income tax matters

For Mexican purposes, corporate income tax is computed on accrued basis. MITL requires taxable profit to be determined by considering revenue net of tax deductions. Prior years' tax losses can be utilized to offset current year taxable income. Income tax is determined by applying the 30% rate on the net amount after tax losses utilization. For tax purposes, income is considered taxable at the earlier of: (i) the time the revenue is collected, (ii) the service is provided or (iii) the time of the issuance of the invoice. Expenses are deductible for tax purposes generally on an accrual basis, with some exceptions, once the requirements established in the tax law are fulfilled.

Central America (Guatemala, Costa Rica and El Salvador)

According to “GITL”, under the regime on profits from business activities, net operating losses cannot offset taxable income in prior or future years. For the years ended December 31, 2025, 2024 and 2023, our subsidiary in Guatemala generated tax profit (loss) of US$211, US$966 and US$623, respectively.

According to “CRITL”, under the regime on profits from business activities, tax losses can offset taxable income in a term of three years. For the years ended December 31, 2025, 2024 and 2023, our subsidiary in Costa Rica generated net operating profit (loss) for an amount of US$(3,400), US$558 and US$(9,503), respectively. Regarding operating loss no deferred tax asset has been recognized.

According to “ESITL”, under the regime on profits from business activities, net operating losses cannot offset taxable income in prior or future years. For the years ended December 31, 2025, 2024 and 2023, our subsidiary in El Salvador generated net operating gain for an amount of US$1,261, US$35,809 and US$3,245, respectively.

e) An analysis of consolidated deferred taxes is as follows:

Schedule of consolidated deferred taxes
	As of December 31,
	2025			2024
Deferred income tax assets:
Lease liability		US$	974,225		US$	871,608
Unearned transportation revenue			79,186			14,440
Aircraft and engine lease return obligation			73,009			98,933
Tax losses available for offsetting against future taxable income			965			234
Allowance for doubtful accounts			463			431
Other financing agreements			115,385			92,640
Employee benefits			4,389			4,256
Employee profit sharing			99			8,195
Derivative financial instruments			59			317
Provisions			85,619			33,993
Total deferred income tax assets			1,333,399			1,125,047
Deferred income tax liabilities:
Right-of-use asset			738,703			659,190
Supplemental rent			40,857			59,844
Rotable spare parts, furniture and equipment, net			184,498			120,585
Inventories			5,018			5,262
Other prepayments			1,182			2,981
Prepaid expenses and other assets			14,954			8,914
Total deferred income tax liabilities			985,212			856,776
Deferred taxes		US$	348,187		US$	268,271

As of December 31, 2025 and 2024 the amount of deferred income tax as follows:


	2025				2024
Deferred income tax assets		US$	359,770			US$	286,199
Deferred income tax liabilities			(11,583	)			(17,928	)
Deferred income tax assets, net		US$	348,187			US$	268,271

A reconciliation of deferred income tax asset, net is as follows:


	2025				2024
Opening balance as of January 1,		US$	268,271			US$	220,316
Deferred income tax benefit during the current year recorded on profits			79,664				47,870
Deferred income tax benefit during the current year recorded in accumulated other comprehensive loss			258				157
Conversion effects			(6	)			(72	)
Closing balance as of December 31,		US$	348,187			US$	268,271

According to IAS 12, “Income Taxes”, a deferred income tax asset should be recognized for the carry-forward of available tax losses to the extent that it is probable that future taxable income will be available against which the available tax losses can be utilized. In these regards, the Company has recognized as of December 31, 2025 and 2024 a deferred tax asset for tax losses of US$965 and US$234, respectively.

An analysis of the available tax losses carry-forward of the Company at December 31, 2025 is as follows:


Year of loss	Historical Losses			Adjusted losses			Amortized losses			Amount outstanding to amortize			Year of expiration
2020		US$	3,145		US$	2,894		US$	1,926		US$	968		2030
2021			630			793			—			793		2031
2022			5,509			5,545			292			5,253		2026
2023			13,693			13,693			—			13,693		2027
2024			2,340			2,421			282			2,139		2028
		US$	25,317		US$	25,346		US$	2,500		US$	22,846

During the years ended December 31, 2025 and 2024, the Company utilized US$2,500 and US$107,885 of the available tax loss carry-forwards, respectively.

A breakdown of available tax loss carry-forward of Controladora and its subsidiaries as of December 31, 2025, is as follows:


	Historical loss			Adjusted losses			Amortized losses				Total amount outstanding to amortize
Vuela Aviación		US$	19,630		US$	19,630		US$	—			US$	19,630
Comercializadora			4,119			4,866			(1,650	)			3,216
Viajes Vuela			1,568			850			(850	)			—
		US$	25,317		US$	25,346		US$	(2,500	)		US$	22,846
Unrecognized Net Operating Losses (NOLs)													(19,630	)
												US$	3,216
Tax rate													30	%
Deferred income tax												US$	965

The temporary differences associated with investments in the Company’s subsidiaries, for which a deferred tax liability has not been recognized in the periods presented, aggregate in 2025 was US$19,492 (2024 was US$15,679). The Company has determined that the undistributed profits of its subsidiaries will not be distributed in the foreseeable future. The Company has an agreement with its associate that the profits of the associate will not be distributed until it obtains the consent of the Company. The Company does not anticipate giving such consent at the reporting date. Furthermore, the Company will not distribute its profits until it obtains the consent of all venture partners.

f) At December 31, 2025, the Company had the following tax balances:

Schedule of tax balances
	2025
Cuenta de Capital de Aportación (“CUCA”)		US$	335,667
Cuenta de Utilidad Fiscal Neta (“CUFIN”)			344,445

As of December 31, 2025, the Company has tax proceedings regarding uncertain tax positions by an amount of about US$88.6 million, associated to the deductibility of certain Company expenses during 2013, 2014 and 2015. The Company has filed legal administrative procedures. Volaris considers that has solid arguments to believe that it will not have adverse effects as such no adjustments have been considered. Nonetheless, until all stages in the procedures are exhausted in each proceeding, the Company cannot assure the achievement of a final favorable resolution.