Significant components of deferred tax assets and liabilities are as follows:

 

 

 

Of the changes in deferred tax assets and deferred tax liabilities for the years ended March 31, 2023, 2024 and 2025, the amount recognized as income tax expense in the consolidated statement of income is as follows:

 

The deductible temporary differences, unused tax losses, and unused tax credits for which no deferred tax asset is recognized in the statement of financial position:

 

The expected expiration date of the carryforwards of tax losses for which deferred tax assets are not recognized are as follows:

 

 

 

The expected expiration date of the carryforwards of tax credit for which deferred tax assets are not recognized are as follows:

 

Of the temporary differences in investments in foreign subsidiaries, because management intends to reinvest undistributed earnings of foreign subsidiaries to the extent not expected to be remitted in the foreseeable future, no deferred tax liability is recognized. As of March 31, 2024 and 2025, the temporary differences totaled ¥4,630,892 million and ¥5,667,006 million, respectively, and Toyota estimates an additional deferred tax liability of ¥232,645 million and ¥245,292 million would be required, respectively, if the full amount of those undistributed earnings were remitted.

The income tax expense for the years ended March 31, 2023, 2024 and 2025 consists of the following:

 

 

 

Toyota is subject to a number of different income taxes which, in the aggregate, indicate a statutory rate in Japan of approximately 30.9% for the years ended March 31, 2023, 2024 and 2025. The statutory tax rates in effect for the year in which the temporary differences are expected to reverse are used to calculate the tax effects of temporary differences which are expected to reverse in future years. Reconciliation of the differences between the statutory tax rate and the average effective tax rate is as follows:

 

The Organisation for Economic and Development (OECD) has issued model rules for the framework of global minimum taxation, known as Pillar Two. Toyota operates in jurisdictions where these rules, including the Qualified Domestic Minimum Tax, have been enacted or are close to being enacted.

After assessing the potential impact on the financial statements of our constituent entities, Toyota does not expect any significant exposure to additional corporate income tax due to the global minimum taxation.

Furthermore, Toyota is applying the temporary exception under IAS 12 concerning deferred tax requirements. As a result, Toyota does not recognize or disclose any deferred tax assets or liabilities related to corporate income tax that may arise from the global minimum taxation.