Income taxes (Tables)

12 Months Ended

Mar. 31, 2025

Disclosure of Components of Deferred Tax Assets and Liabilities

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


	Yen in millions
	March 31,
	2024			2025

Deferred tax assets
Defined benefit plan liabilities		100,770			156,650
Accrued expenses and liabilities for quality assurance		724,325			821,680
Other accrued employees’ compensation		138,219			146,548
Operating loss carryforwards for tax purposes		50,214			44,324
Allowance for doubtful accounts and credit losses		103,860			115,209
Property, plant and equipment and other assets		296,739			340,410
Other		569,648			504,892

Total deferred tax assets		1,983,775			2,129,712

Deferred tax liabilities
Changes in fair value of financial instruments measured in other comprehensive income		(1,015,448	)		(727,581	)
Undistributed earnings of foreign subsidiaries		(42,365	)		(63,179	)
Undistributed earnings of associates and joint ventures		(1,176,045	)		(1,223,489	)
Basis difference of acquired assets		(82,852	)		(71,386	)
Capitalized development costs		(189,496	)		(181,775	)
Lease transactions		(897,291	)		(860,487	)
Other		(297,686	)		(143,379	)

Total deferred tax liabilities		(3,701,183	)		(3,271,276	)

Net deferred tax assets and liabilities		(1,717,408	)		(1,141,564	)

Disclosure of Changes in Deferred Tax Assets and Deferred Tax Liabilities Recognized as Income Tax Expense in the Consolidated Statements of Income

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:


	Yen in millions
	For the years ended March 31,
	2023			2024			2025
Defined benefit plan liabilities		802			(4,333	)		3,093
Accrued expenses and liabilities for quality assurance		26,942			40,626			108,554
Other accrued employees’ compensation		(2,745	)		6,925			8,930
Operating loss carryforwards for tax purposes		116,344			(133,776	)		(5,609	)
Allowance for doubtful accounts and credit losses		4,474			(551	)		11,776
Property, plant and equipment and other assets		24,850			11,518			49,177
Undistributed earnings of foreign subsidiaries		12,391			(2,869	)		(20,814	)
Undistributed earnings of associates and joint ventures		(63,520	)		(43,526	)		(54,492	)
Basis difference of acquired assets		(12,075	)		1,152			10,991
Capitalized development costs		4,003			12,824			7,815
Lease transactions		(487,702	)		186,196			18,780
Other		44,144			88,582			(25,114	)

Total		(332,091	)		162,768			113,087

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


	Yen in millions
	March 31,
	2024		2025

Deductible temporary difference		1,292,277		1,944,948
Carryforwards of tax losses		762,196		841,136
Carryforwards of tax credit		95,462		61,687

Total		2,149,935		2,847,770

Disclosure of Expected expiration date of the carryforwards of tax losses for which deferred tax assets are not recognized

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


	Yen in millions
	March 31,
	2024		2025

Within 5 years		7,791		4,323
Between 5 and 10 years		357,421		319,631
Later than 10 years		396,984		517,182

Total		762,196		841,136

Disclosure of Expected expiration date of the carryforwards of tax credit for which deferred tax assets are not recognized

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


	Yen in millions
	March 31,
	2024		2025

Within 5 years		4,764		3,778
Between 5 and 10 years		3,680		3,878
Later than 10 years		87,018		54,031

Total		95,462		61,687

Disclosure of Income Tax Expense

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


	Yen in millions
	For the years ended March 31,
	2023		2024			2025

Current income tax expense:
TMC and domestic subsidiaries		758,772		1,432,299			965,512
Foreign subsidiaries		84,902		624,134			772,410

Total current		843,674		2,056,433			1,737,922

Deferred income tax expense (benefit):
TMC and domestic subsidiaries		27,783		(42,906	)		(131,329	)
Foreign subsidiaries		304,308		(119,862	)		18,242

Total deferred		332,091		(162,768	)		(113,087	)

Total income tax expense		1,175,765		1,893,665			1,624,835

Disclosure of Reconciliation of Statutory Tax Rate and Effective Income Tax Rate

Reconciliation of the differences between the statutory tax rate and the average effective tax rate is as follows:


	For the years ended March 31,
	2023			2024			2025

Statutory tax rate		30.9	%		30.9	%		30.9	%
Increase (reduction) in taxes resulting from:
Non-deductible expenses		0.8			0.3			0.8
Tax-exempt income		(0.4	)		(0.2	)		(0.6	)
Deferred tax liabilities on undistributed earnings of foreign subsidiaries		1.1			0.6			1.0
Effects of investments accounted for using the equity method		(5.4	)		(3.4	)		(2.8	)
Deferred tax liabilities on undistributed earnings of associates and joint ventures		3.1			2.1			1.9
Change in unrecognized deferred tax assets		6.3			0.4			2.1
Tax credits		(3.5	)		(2.1	)		(4.2	)
The difference between the statutory tax rate in Japan and that of foreign subsidiaries		(1.5	)		(2.0	)		(3.1	)
Unrecognized tax benefits adjustments		0.4			—			(1.1	)
Revision to deferred tax assets and liabilities at the fiscal year-end due to changes in tax rates		—			—			0.4
Other		0.3			0.6			0.0

Average effective tax rate		32.0	%		27.2	%		25.3	%