v3.25.2
Income Taxes
 12 Months Ended
Mar. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes INCOME TAXES
Income before Income Tax Expense
Income before income tax expense by jurisdiction for the fiscal years ended March 31, 2023, 2024 and 2025 was as follows:
 2023
(As Adjusted)		2024
(As Adjusted)		2025
 (in millions)
Domestic income (loss) ¥(588,227)¥611,036 ¥(407,567)
Foreign income1,049,539 1,267,190 2,203,143 
Total¥461,312 ¥1,878,226 ¥1,795,576 
Income Tax Expense
The detail of current and deferred income tax expense for the fiscal years ended March 31, 2023, 2024 and 2025 was as follows:
 2023
(As Adjusted)		2024
(As Adjusted)		2025
 
(in millions)
Current:     
Domestic¥250,780 ¥106,951 ¥118,433 
Foreign203,213 302,494 241,724 
Total453,993 409,445 360,157 
Deferred:
Domestic(346,367)87,990 103,533 
Foreign(60,875)3,222 64,248 
Total(407,242)91,212 167,781 
Income tax expense
46,751 500,657 527,938 
Income tax expense (benefit) reported in Accumulated OCI relating to:
Investment securities(59,568)33,327 (46,184)
Debt valuation adjustments7,858 (19,707)4,941 
Derivatives qualifying for cash flow hedges(2,268)(120)(436)
Defined benefit plans(10,301)170,191 32,952 
Foreign currency translation adjustments85,074 155,814 (11,455)
Total20,795 339,505 (20,182)
Total¥67,546 ¥840,162 ¥507,756 

Prior to the fiscal year ended March 31, 2023, the MUFG Group filed tax returns on a consolidated basis for corporate income taxes within Japan, and from the beginning of fiscal year ended March 31, 2023, the MUFG Group applied the Group Tax Sharing System, where the calculation of taxable income or loss is still made based upon the combined profits or losses of the parent company and its wholly-owned domestic subsidiaries, but the tax payments are made by each of these companies.
On March 31, 2025, the Japanese Diet enacted the tax related law, “Special Measures Law for Securing Defense Funding.” As a result, starting from fiscal years beginning on or after April 1, 2026, a 4.0% surcharge will be added to the corporate tax rate. This surcharge is based on the corporate tax rate of 23.2% and entails an approximately 0.9% increase in the effective statutory rate of corporate income tax from 30.6% to 31.5%. The change in tax laws resulted in an increase of ¥20,982 million in income tax expense for the fiscal year ended March 31, 2025.
Reconciliation of Effective Income Tax Rate
Income taxes in Japan applicable to the MUFG Group are imposed by the national, prefectural and municipal governments, and in the aggregate resulted in a normal effective statutory rate of approximately 30.6%, 30.6%, and 30.6% for the fiscal years ended March 31, 2023, 2024 and 2025, respectively. Foreign subsidiaries are subject to income taxes of the countries in which they operate.
A reconciliation of the effective income tax rates reflected in the accompanying consolidated statements of income to the combined normal effective statutory tax rates for the fiscal years ended March 31, 2023, 2024 and 2025 is as follows:
 2023
(As Adjusted)		2024
(As Adjusted)		2025
Combined normal effective statutory tax rate30.6 %30.6 %30.6 %
Nondeductible expenses1.1 0.4 0.4 
Impairment of goodwill2.2 — 2.4 
Foreign tax credit and payments(6.7)0.9 0.2 
Lower tax rates applicable to income of subsidiaries(4.1)(1.5)(2.5)
Change in valuation allowance(1.3)(1.4)0.3 
Taxation for gain on sale of shares in subsidiary4.8 
(1)
— — 
Nontaxable dividends received(21.1)(4.1)(5.3)
Undistributed earnings of subsidiaries0.2 0.9 1.8 
Tax and interest expense for uncertainty in income taxes— — 1.7 
Tax penalty and tax refund— — (2.9)
(2)
Noncontrolling interest income 0.4 0.6 0.1 
Effect of changes in tax laws0.9 — 1.2 
Expiration of loss carryforward0.2 0.1 1.4 
Other—net2.9 0.2 — 
Effective income tax rate10.1 %26.7 %29.4 %

Notes:
(1)In March 2023, MUAH repurchased a portion of the shares in MUAH held by MUFG and MUFG Bank. The transaction resulted in the realization of a difference between the book value of the shares in MUAH for accounting and tax purposes, resulting in a ¥22,250 million increase of income tax expense and a 4.8 percentage points increase in the effective tax rate for the fiscal year ended March 31, 2023.
(2)For the fiscal year ended March 31, 2025, MUAH recognized a tax benefit of ¥52,129 million related to the amendment of the California state tax return, resulting in a 2.9 percentage points decrease in the effective tax rate.

Deferred Tax Assets and Liabilities
Deferred tax assets and liabilities are computed for each tax jurisdiction using currently enacted tax rates applicable to periods when the temporary differences are expected to reverse. The tax effects of the items comprising the MUFG Group’s net deferred tax assets at March 31, 2024 and 2025 were as follows:
 2024
(As Adjusted)		2025
 
(in millions)
Deferred tax assets:   
Allowance for credit losses¥457,344 ¥390,614 
Operating loss carryforwards93,134 86,747 
Loans— — 
Accrued liabilities and other386,583 328,371 
Premises and equipment122,705 113,572 
Derivative financial instruments530,127 649,519 
Obligations under operating leases86,288 89,790 
Valuation allowance(130,881)(122,241)
Total deferred tax assets¥1,545,300 ¥1,536,372 
 2024
(As Adjusted)		2025
 
(in millions)
Deferred tax liabilities:   
Investment securities (including trading account assets at fair value under the fair value option)729,381 642,105 
Loans2,186 3,466 
Intangible assets73,522 87,064 
Lease transactions12,240 16,866 
Defined benefit plans221,440 270,634 
Investments in subsidiaries and affiliates841,186 1,002,424 
Right-of-use assets of operating leases60,432 64,074 
Other74,821 81,284 
Total deferred tax liabilities2,015,208 2,167,917 
Net deferred tax liabilities¥(469,908)¥(631,545)
The valuation allowance was provided primarily against deferred tax assets recorded at MUFG and its subsidiaries with operating loss carryforwards. The valuation allowance is determined to reduce the measurement of deferred tax assets not expected to be realized. Management considers all available evidence, both positive and negative, to determine whether the valuation allowance is necessary based on the weight of that evidence. Management determines the amount of the valuation allowance based on future reversals of existing taxable temporary differences and future taxable income exclusive of reversing temporary differences. Future taxable income is developed from forecasted operating results, based on recent historical trends and approved business plans, the eligible carryforward periods and other relevant factors.
For certain subsidiaries where strong negative evidence exists, such as the existence of significant amounts of operating loss carryforwards, cumulative losses and the expiration of unused operating loss carryforwards in recent years, a valuation allowance was recognized against the deferred tax assets as of March 31, 2024 and 2025 to the extent that it is more likely than not that they will not be realized.
Income taxes are not provided on undistributed earnings of certain foreign subsidiaries that are considered to be indefinitely reinvested in the operations of such subsidiaries. At March 31, 2024, the undistributed earnings of such foreign subsidiaries amounted to approximately ¥110,552 million and at March 31, 2025, the undistributed earnings of such foreign subsidiaries amounted to approximately ¥130,790 million. Determination of the amount of unrecognized deferred tax liabilities with respect to these undistributed earnings is not practicable because of the complexity associated with its hypothetical calculation including foreign withholding taxes and foreign tax credits. MUFG has neither the plan nor the intention to dispose of investments in such foreign subsidiaries and, accordingly, does not expect to record capital gains or losses, or otherwise monetize the undistributed earnings of such foreign subsidiaries.
Furthermore, under the Japanese tax law, 95% of a dividend received from a foreign company in which a domestic company has held generally at least 25% of the outstanding shares for a continuous period of six months or more ending on the date on whi
ch the dividend is declared can be excluded from the domestic company’s taxable income. Therefore, if undistributed earnings of certain foreign subsidiaries are repatriated through dividends, only 5% of the amount of dividends will be included in taxable income.
Operating Loss and Tax Credit Carryforwards
At March 31, 2025, the MUFG Group had operating loss carryforwards for corporate tax of ¥199,246 million and tax credit carryforwards of ¥9,268 million for tax purposes. Such carryforwards, if not utilized, are scheduled to expire as follows:
 
Operating loss
 carryforwards
 
Tax credit
 carryforwards
 (in millions)
Fiscal year ending March 31:   
2026¥53,901 ¥315 
2027886 292 
20281,833 153 
202913,175 346 
203067,607 183 
20317,143 247 
2032 and thereafter5,394 5,911 
No definite expiration date49,307 1,821 
Total¥199,246 ¥9,268 
Uncertainty in Income Tax
The following is a roll-forward of the MUFG Group’s unrecognized tax benefits for the fiscal years ended March 31, 2023, 2024 and 2025:
 202320242025
 
(in millions)
Balance at beginning of fiscal year¥21,794 ¥25,400 ¥10,521 
Gross amount of increases for current year’s tax positions451 32 — 
Gross amount of increases for prior years’ tax positions279 — 40,882 
Gross amount of decreases for prior years’ tax positions(166)(16,719)(23)
Net amount of changes relating to settlements with tax authorities
— — (2,258)
Decreases due to lapse of applicable statutes of limitations(116)— (772)
Foreign exchange translation and other3,158 1,808 2,430 
Balance at end of fiscal year¥25,400 ¥10,521 ¥50,780 
The MUFG Group classifies interest and penalties, if applicable, related to income taxes as Income tax expense. Accrued interest and penalties (not included in the “unrecognized tax benefits” above) are a component of Other liabilities. The following is a roll-forward of the interest and penalties recognized in the accompanying consolidated financial statements for the fiscal years ended March 31, 2023, 2024 and 2025:
 202320242025
 
(in millions)
Balance at beginning of fiscal year¥2,848 ¥2,167 ¥1,260 
Total interest and penalties in the consolidated statements of income
(1,052)(1,218)(1,770)
Total cash settlements, foreign exchange translation and other371 311 815 
Balance at end of fiscal year¥2,167 ¥1,260 ¥305 
The MUFG Group is subject to ongoing tax examinations by the tax authorities of the various jurisdictions in which it operates. The following are the major tax jurisdictions in which the MUFG Group operates and the status of years under audit or open to examination:
JurisdictionTax years
Japan2023 and forward
United States—Federal2019 and forward
United States—California2017 and forward
Indonesia2019 and forward
The MUFG Group is currently under continuous examinations by the tax authorities in various domestic and foreign jurisdictions and many of these examinations are resolved every year. The unrecognized tax benefits will decrease since resolved items will be removed from the balance regardless of whether their resolution results in payment or recognition. It is reasonably possible that the unrecognized tax benefits will not increase or decrease during the next twelve months.