Ivanhoe Electric Inc.IE
Ivanhoe Electric Inc. Income Taxes Disclosure
19. Income taxes:
Total income tax provision / (benefit) for the years ended December 31, 2025, 2024 and 2023 are allocated as follows:
| Year ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Income from continuing operations | $ | 12 | $ | 32 | $ | (584) | |||||||||||
| Equity, non-controlling interests investment in subsidiary | — | — | 2,846 | ||||||||||||||
| Total income tax provision / (benefit) | $ | 12 | $ | 32 | $ | 2,262 | |||||||||||
Major components of the Company’s income tax provision / (benefit) from continuing operations for the years ended December 31, 2025, 2024 and 2023 are as follows:
| Year ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Current: | |||||||||||||||||
| U.S. Operations | $ | — | $ | — | $ | — | |||||||||||
| Foreign | 12 | 32 | (380) | ||||||||||||||
| Total current income tax provision / (benefit) | 12 | 32 | (380) | ||||||||||||||
| Deferred: | |||||||||||||||||
| U.S. Operations | — | — | — | ||||||||||||||
| Foreign | — | — | (204) | ||||||||||||||
| Total deferred income tax provision / (benefit) | — | — | (204) | ||||||||||||||
| Total income tax provision / (benefit) | $ | 12 | $ | 32 | $ | (584) | |||||||||||
Loss from continuing operations before income taxes for the years ended December 31, 2025, 2024 and 2023 consists of the following:
| Year ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| U.S. Operations | $ | (73,332) | $ | (136,615) | $ | (124,083) | |||||||||||
| Foreign | (51,704) | (3,622) | (92,576) | ||||||||||||||
| Total | $ | (125,035) | $ | (140,238) | $ | (216,659) | |||||||||||
The annual income tax expense (benefit) attributable to income from continuing operations is different from the amount that would be provided by applying the statutory federal income tax rate to the Company’s pretax (loss) income. The reasons for the difference are:
| Year ended December 31, | ||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||||||||
| Amount | % | Amount | % | Amount | % | |||||||||||||||||||||
| Expected income tax (benefit) expense at U.S. Federal tax rate | $ | (26,258) | 21 | % | $ | (29,450) | 21 | % | $ | (45,498) | 21 | % | ||||||||||||||
| Reconciling items: | ||||||||||||||||||||||||||
| Domestic Tax | ||||||||||||||||||||||||||
| Permanent differences | 3,440 | (3) | 3,964 | (3) | 4,457 | (2) | ||||||||||||||||||||
| Change in valuation allowance | 12,568 | (10) | 24,700 | (18) | 21,587 | (10) | ||||||||||||||||||||
| Other | (608) | 1 | 25 | — | 13 | — | ||||||||||||||||||||
| Foreign Tax | ||||||||||||||||||||||||||
| Difference between statutory and foreign tax rate | (1,156) | 1 | (11,353) | 8 | (3,513) | 2 | ||||||||||||||||||||
| Change in valuation allowance | 10,633 | (9) | 8,079 | (6) | 21,262 | (10) | ||||||||||||||||||||
| Other | 1,393 | (1) | 4,067 | (3) | 1,108 | (1) | ||||||||||||||||||||
| Income tax expense (benefit) | $ | 12 | — | % | $ | 32 | — | % | $ | (584) | — | % | ||||||||||||||
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2025 and 2024 are presented below.
| As at December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Deferred tax assets: | |||||||||||
| Exploration mineral interest | $ | 56,783 | $ | 46,481 | |||||||
| Net operating losses | 90,306 | 73,205 | |||||||||
| Equity method investment in joint venture | 14,936 | 12,552 | |||||||||
| Foreign capital losses | 5,471 | 5,485 | |||||||||
| Capital loss carry-forward | 1,618 | 1,555 | |||||||||
| Other | 1,663 | 1,249 | |||||||||
| Total gross deferred tax assets | 170,777 | 140,527 | |||||||||
| Less: valuation allowance | (169,919) | (139,953) | |||||||||
| Net deferred tax assets | 858 | 574 | |||||||||
| Deferred tax liabilities: | |||||||||||
| Exploration mineral interest | (4,751) | (4,049) | |||||||||
| Other | (858) | (574) | |||||||||
| Total gross deferred tax liabilities | (5,609) | (4,623) | |||||||||
| Net deferred tax liability | $ | (4,751) | $ | (4,049) | |||||||
The Company evaluated the positive and negative evidence available to determine the amount of valuation allowance required on its deferred tax assets. The Company has recognized a valuation allowance against deferred income tax assets in excess of those supported by the reversal of taxable temporary differences. As of December 31, 2025, a $169.9 million valuation allowance has been provided. The changes in the valuation allowance for the years ended December 31, 2025 and 2024 are as follows:
| As at December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Balance, beginning of year | $ | (139,953) | $ | (117,154) | |||||||
| (Increase) decrease due to foreign currency translation | (6,764) | 5,361 | |||||||||
| Increase related to non-utilization of deferred tax assets due to uncertainty of recovery and increase related to non-utilization of net operating loss carryforwards | (23,201) | (36,063) | |||||||||
| (Increase) decrease related to utilization and expiration of deferred tax assets, other | (2) | 7,903 | |||||||||
| Balance, end of year | $ | (169,919) | $ | (139,953) | |||||||
As of December 31, 2025, the Company has the following net operating loss carryforwards for income tax purposes:
| Country | Losses | Expiry | ||||||||||||
| United States | $ | 344,354 | 2036 to 2045 | |||||||||||
| Canada | 46,998 | 2028 to 2045 | ||||||||||||
| Colombia | 13,160 | 2029 to 2036 | ||||||||||||
| Singapore | 4,709 | Indefinite | ||||||||||||
The Company’s utilization of U.S. net operating loss carryforwards may be subject to annual limitations if there is a change in control as defined under Internal Revenue Code Section 382. As of December 31, 2025, no change in control has occurred in the Ivanhoe Electric group.
The Company files income tax returns in the U.S. federal jurisdiction and various U.S. state and foreign jurisdictions.
The Company had no unrecognized income tax benefits as of December 31, 2025 or 2024. Due to the net operating loss carryover position coupled with the lack of any unrecognized tax benefits, the Company has not provided for any interest or penalties associated with any uncertain tax positions. If interest and penalties were to be assessed, the Company would charge interest to interest expense, and penalties to general and administrative expense. It is not anticipated that there will be any significant changes to unrecognized tax benefits within the next 12 months.
The Company has not recognized a deferred tax liability related to its investments in foreign subsidiaries that are essentially permanent in duration. It is not practicable to estimate the amount of deferred tax liability related to investments in these foreign subsidiaries.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 23, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Feb 26, 2024 | |
| 2022 | Mar 14, 2023 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.