Toyota 2009 Annual Report Download - page 84

Financial Section
TOYOTA MOTOR CORPORATION
82
The provision for income taxes consists of the following:
U.S. dollars
Yen in millions in millions
For the year ended
For the years ended March 31, March 31,
2007 2008 2009 2009
Current income tax expense:
Parent company and domestic subsidiaries ................................................. ¥591,840 ¥491,185 ¥ 65,684 $ 668
Foreign subsidiaries ........................................................................................ 174,164 338,852 72,864 742
Total current ................................................................................................. 766,004 830,037 138,548 1,410
Deferred income tax expense (benefit):
Parent company and domestic subsidiaries ................................................. 51,740 119,333 (26,472) (269)
Foreign subsidiaries ........................................................................................ 80,568 (37,875) (168,518) (1,716)
Total deferred .............................................................................................. 132,308 81,458 (194,990) (1,985)
Total provision ............................................................................................. ¥898,312 ¥911,495 ¥ (56,442) $ (575)
For the years ended March 31,
2007 2008 2009
Statutory tax rate ................................................................................................................................. 40.2% 40.2% 40.2%
Increase (reduction) in taxes resulting from:
Non-deductible expenses............................................................................................................... 0.5 0.6 (5.0)
Deferred tax liabilities on undistributed earnings of foreign subsidiaries ................................. 0.7 0.9 (2.5)
Deferred tax liabilities on undistributed earnings of affiliates accounted
for by the equity method ............................................................................................................. 2.4 3.1 (2.5)
Valuation allowance ......................................................................................................................... (0.1) (0.4) (25.4)
Tax credits ......................................................................................................................................... (3.9) (4.4) 10.0
Other ................................................................................................................................................. (2.1) (2.6) (4.7)
Effective income tax rate..................................................................................................................... 37.7% 37.4% 10.1%
The other includes the difference between the statutory tax rate of TMC and that of foreign subsidiaries during the years ended March
31, 2007, 2008 and 2009.
Significant components of deferred tax assets and liabilities are as follows:
U.S. dollars
Yen in millions in millions
March 31, March 31,
2008 2009 2009
Deferred tax assets
Accrued pension and severance costs .................................................................................... ¥ 156,924 ¥ 288,849 $ 2,940
Warranty reserves and accrued expenses .............................................................................. 205,564 227,757 2,319
Other accrued employees’ compensation ............................................................................. 129,472 99,867 1,017
Operating loss carryforwards for tax purposes ...................................................................... 54,368 290,044 2,953
Inventory adjustments .............................................................................................................. 67,904 64,439 656
Property, plant and equipment and other assets ................................................................... 180,922 208,983 2,127
Other .......................................................................................................................................... 332,779 413,728 4,212
Gross deferred tax assets ..................................................................................................... 1,127,933 1,593,667 16,224
Less—Valuation allowance ....................................................................................................... (82,191) (208,627) (2,124)
Total deferred tax assets ...................................................................................................... 1,045,742 1,385,040 14,100
Deferred tax liabilities
Unrealized gains on securities ................................................................................................. (279,795) (100,698) (1,025)
Undistributed earnings of foreign subsidiaries ..................................................................... (20,980) (13,971) (142)
Undistributed earnings of affiliates accounted for by the equity method ......................... (586,530) (536,876) (5,466)
Basis difference of acquired assets ......................................................................................... (37,919) (38,356) (391)
Lease transactions .................................................................................................................... (405,028) (472,817) (4,813)
Gain on securities contribution to employee retirement benefit trust ................................ (66,523) (66,523) (677)
Other .......................................................................................................................................... (80,230) (57,113) (581)
Gross deferred tax liabilities ................................................................................................ (1,477,005) (1,286,354) (13,095)
Net deferred tax assets (liability) ......................................................................................... ¥ (431,263) ¥ 98,686 $ 1,005
Toyota is subject to a number of different income taxes which,
in the aggregate, indicate a statutory rate in Japan of approxi-
mately 40.2% for the years ended March 31, 2007, 2008, and
2009. Such rate was also used to calculate the tax effects of tem-
porary differences, which are expected to be realized in the
future years. Reconciliation of the differences between the statu-
tory tax rate and the effective income tax rate is as follows: