Japan is approximately 30.2% for each of the years in the three-year period ended March 31, 2026. The Japanese statutory income tax rate for the years ended March 31, 2024, 2025 and 2026 differs from the average effective tax rate for the following reasons:

 

The components by major factor in deferred tax assets and deferred tax liabilities as of March 31, 2025 and 2026 are as follows:

 

The changes in deferred tax assets and deferred tax liabilities recognized as income tax expense in the consolidated statements of income for the years ended March 31, 2024, 2025 and 2026 are as follows:

 

 considers the probability that a portion of, or all of, the deductible temporary differences, carryforward of unused tax losses and carryforward of unused tax credit can be utilized against future taxable profits in the recognition of deferred tax assets. In assessing recoverability of deferred tax assets, management considers the scheduled reversal of deferred tax liabilities, projected future taxable profit and tax planning strategies. Based upon the level of historical taxable profit and projections for future taxable profit over the periods for which the deferred tax assets are deductible, management believes it is probable that Honda will utilize the benefits of these deferred tax assets as of March 31, 2025 and 2026. Uncertainty of estimates of future taxable profit could increase due to changes in the economic environment surrounding Honda, effects by market conditions, effects of currency fluctuations or other factors. Deferred tax assets recognized by entities that have suffered a loss in either the preceding or current period are ¥

 million and ¥

 million as of March 31, 2025 and 2026, respectively.

Deductible temporary differences, carryforward of unused tax losses and carryforward of unused tax credit for which deferred tax assets are not recognized as of March 31, 2025 and 2026 are as follows:

 

The components by expiry of the carryforward of unused tax losses for which deferred tax assets are not recognized as of March 31, 2025 and 2026 are as follows:

 

The components by expiry of the carryforward of unused tax credit for which deferred tax assets are not recognized as of March 31, 2025 and 2026 are as follows:

 

 relating to investments in subsidiaries and interests in joint ventures for which deferred tax liabilities are not recognized as of March 31, 2025 and 2026 are ¥8,127,532 million and ¥9,268,070 million, respectively.