INTERNATIONAL TOWER HILL MINES LTD Income Taxes Disclosure
6. INCOME TAXES
A reconciliation of income taxes at statutory rates with the reported taxes is as follows for the years ended December 31, 2025 and 2024:
December 31, | December 31, |
| |||||||||
| 2025 | | 2024 |
| |||||||
Loss for the year | | $ | (4,638,333) | | $ | (3,599,372) | |||||
Federal and Provincial tax rate | 27.0 | % |
| 27.0 | % | ||||||
| |||||||||||
Expected income tax (recovery) | 27.0 | % | $ | (1,252,000) | 27.0 | % | $ | (972,000) | |||
Change in statutory, foreign tax, foreign exchange rates and other | 7.0 | % | (323,000) | (12.6) | % | 455,000 | |||||
Permanent difference | (4.1) | % | 190,000 | (2.4) | % | 88,000 | |||||
Share issue cost | 0.8 | % | (35,000) | 1.7 | % | (60,000) | |||||
Adjustment to prior years provision versus statutory tax returns | (430.7) | % | 19,979,000 | (7.1) | % |
| 257,000 | ||||
Change in valuation allowance | 400.1 | % | (18,559,000) | (6.4) | % |
| 232,000 | ||||
Total income tax expense (recovery) | $ | — | $ | — | |||||||
Current income tax | $ | — | $ | — | |||||||
Deferred tax recovery | $ | — | $ | — | |||||||
The significant components of the Company’s deferred tax assets that have not been included on the consolidated statement of financial position are as follows:
| December 31, | | December 31, | |||
2025 | 2024 | |||||
Deferred tax assets (liabilities): |
| |
| | ||
Exploration and evaluation assets | $ | — | $ | 16,210,000 | ||
Property and equipment | 7,000 | 7,000 | ||||
Share issue costs |
| 63,000 |
| 45,000 | ||
Non-capital losses available for future period |
| 56,646,000 |
| 55,434,000 | ||
Valuation allowance |
| (53,137,000) |
| (71,696,000) | ||
Net deferred tax asset | 3,579,000 | — | ||||
Deferred tax liabilities |
|
| ||||
Exploration and evaluation assets |
| (3,579,000) |
| — | ||
Net deferred tax assets | $ | — | $ | — | ||
At December 31, 2025, the Company has available non-capital losses for Canadian income tax purposes of approximately C$ 31,160,000 and net operating losses for US income tax purposes of approximately $40,529,000 that do not have an expiration date and $137,153,000 available for carry-forward to reduce future years’ taxable income, if not utilized, expiring as follows:
| | Canada (C$) | | United States ($) | ||
2045 | C$ | 1,595,000 | $ | — | ||
2044 | 906,000 | — | ||||
2043 | 1,063,000 | — | ||||
2042 | 599,000 | — | ||||
2041 | 1,204,000 | — | ||||
2040 | 1,211,000 | — | ||||
2039 | 1,164,000 | — | ||||
2038 | 417,000 | — | ||||
2037 | 1,757,000 | 8,800,000 | ||||
2036 | 1,611,000 | 8,798,000 | ||||
2035 | 395,000 | 10,703,000 | ||||
2034 | 1,792,000 | 12,587,000 | ||||
2033 | 1,687,000 | 14,208,000 | ||||
2032 | 2,854,000 | 16,798,000 | ||||
2031 | 5,051,000 | 40,825,000 | ||||
2030 | 3,052,000 | 18,765,000 | ||||
2029 | 2,378,000 | 2,973,000 | ||||
2028 | 1,301,000 | 1,412,000 | ||||
2027 | 1,031,000 | 1,284,000 | ||||
2026 | 92,000 | — | ||||
C$ | 31,160,000 | $ | 137,153,000 | |||
The Company also has available mineral resource expenses that are related to the Company’s activities in the United States of approximately $60,013,000, which may be deductible for U.S. tax purposes. Future tax benefits, which may arise as a result of applying these deductions to taxable income, have not been recognized in these accounts due to the uncertainty of future taxable income.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 11, 2026 | Showing above |
| 2024 | Mar 12, 2025 | |
| 2023 | Mar 8, 2024 | |
| 2022 | Mar 8, 2023 | |
| 2021 | Mar 9, 2022 | |
| 2020 | Mar 10, 2021 | |
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.