v3.26.1
Income taxes
 12 Months Ended
Mar. 31, 2026
Income Tax Disclosure [Abstract]  
Income taxes
19. Income taxes
Income before income tax expense
The following table presents the components of Income before income tax expense for the fiscal year ended March 31, 2026:
 
    
2026
  
    
(in millions of yen)
  
Domestic
      241,757  
Foreign
      1,443,869  
  
 
 
  
Total Income before income tax expense
     
1,685,627
  
  
 
 
  
Income tax expense
The following tables present the components of Income tax expense for the fiscal years ended March 31, 2024, 2025 and 2026; the table for the fiscal years ended March 31, 2024 and 2025 reflects applicable U.S. GAAP requirements prior to the adoption of ASU No.2023-09:
 
 
  
  2024  
 
 
  2025  
 
 
  
 
 
 
 
 
 
  
(in millions of yen)
 
Current:
  
 
     
 
 
 
     
 
Domestic
      36,237       92,815  
Foreign
      223,529       211,075  
  
 
 
    
 
 
  
Total current tax expense
      259,765       303,890  
  
 
 
    
 
 
  
Deferred:
       
Domestic
      170,106       (101,241 )
Foreign
      (4,750 )      (3,116 )
 
  
 
 
    
 
 
  
Total deferred tax expense (benefit)
      165,355       (104,358 )
  
 
 
    
 
 
  
Total income tax expense
      425,120       199,532  
  
 
 
    
 
 
  
 
 
  
2026
 
 
  
(in millions of yen)
 
Current:
  
 
     
 
Domestic:
  
National
  
 
221,284
 
Local
  
 
32,838
 
Foreign
  
 
170,937
 
  
 
 
 
Total current tax expense
  
 
425,059
 
  
 
 
 
Deferred:
  
Domestic:
  
National
  
 
(70,405
) 
Local
  
 
(4,044
) 
Foreign
  
 
9,003
 
  
 
 
 
Total deferred tax expense (benefit)
  
 
(65,445
) 
  
 
 
 
Total income tax expense
  
 
359,613
 
  
 
 
 
 
 
Income taxes paid
The following table presents the components of Income taxes paid for the fiscal year ended March 31, 2026:
 
 
  
2026
 
 
  
(in millions of yen)
 
Japan:
  
 
     
 
National
  
 
95,979
 
Local
  
 
8,903
 
Foreign:
  
The United States:
  
Federal
  
 
57,759
 
State and local
  
 
15,820
 
Other jurisdictions
  
 
97,982
 
  
 
 
 
Total income taxes paid
  
 
276,443
 
  
 
 
 
The preceding table does not reflect the tax effects of items recorded directly in Equity for the fiscal years ended March 31, 2024, 2025 and 2026. The detailed amounts recorded directly in Equity are as follows:
 
 
  
  2024  
 
 
  2025  
 
 
  2026  
 
 
  
 
 
 
 
 
 
 
 
 
  
(in millions of yen)
 
Net unrealized gains (losses) on
available-for-sale
securities:
  
 
    
 
 
 
    
 
 
 
    
 
Unrealized gains (losses)
      8,273       (22,487 )      (45,991 )
Less: reclassification adjustments
      5,151       5,586       24,560  
  
 
 
    
 
 
    
 
 
  
Total
      13,425       (16,901 )      (21,431 )
  
 
 
    
 
 
    
 
 
  
Foreign currency translation adjustments:
       
Unrealized gains (losses)
      —        2,181       (2,181 )
Less: reclassification adjustments
      —        —        —   
  
 
 
    
 
 
    
 
 
  
Total
      —        2,181       (2,181 )
  
 
 
    
 
 
    
 
 
  
Defined benefit plan adjustments:
       
Unrealized gains (losses)
      42,415       (18,658 )      81,940  
Less: reclassification adjustments
      (9,759 )      (14,301 )      (12,509 )
  
 
 
    
 
 
    
 
 
  
Total
      32,655       (32,960 )      69,431  
  
 
 
    
 
 
    
 
 
  
Own credit risk adjustments:
       
Unrealized gains (losses)
      (6,590 )      6,485       (2,838 )
 
Less: reclassification adjustments
      552       197       (32 )
  
 
 
    
 
 
    
 
 
  
Total
      (6,038 )      6,682       (2,869 )
  
 
 
    
 
 
    
 
 
  
Total tax effect before allocation to noncontrolling interests
      40,043       (40,998 )      42,949  
  
 
 
    
 
 
    
 
 
  
 
 
Reconciliation of Income tax expense
The following table shows a reconciliation of the applicable statutory tax rate to the effective tax rate for the fiscal years ended March 31, 2024 and 2025, and is based on the applicable U.S. GAAP requirements prior to the adoption of ASU No.2023-09:
 
 
  
2024
 
 
2025
 
Effective statutory tax rate
(2)
          30.62 %          30.62 % 
Income not subject to tax
      (0.58 )      (1.22 ) 
Expenses not deductible for tax purposes
      0.08       0.18  
Tax rate differentials of subsidiaries
      (0.92 )      (1.35 ) 
Change in valuation allowance
      (2.34 )      (0.07 ) 
Change in undistributed earnings of subsidiaries
      0.52       1.43  
Noncontrolling interest income (loss) of consolidated VIEs.
      (5.35 )      2.06  
Effect of enacted change in tax rates
      —        (0.36 )
(1)
 
Foreign tax credit and payments
      3.80       (1.80 ) 
Income excluded from taxable income of enterprise tax
      (1.04 )      (2.14 ) 
Controlled foreign company rules
      0.06       0.03  
Other
      1.34       (1.10 ) 
  
 
 
    
 
 
  
Effective income tax rate
      26.19 %      26.28 % 
  
 
 
    
 
 
  
 
Note:
(1)
On March 31, 2025, the National Diet of Japan approved a bill affecting the effective statutory tax rates of MHFG and its domestic subsidiaries. As a result, the effective statutory tax rate will be increased to 31.52% from the previous rate of 30.62% beginning on or after the fiscal year ending March 31, 2027. The increase in the Group’s balance of net deferred tax assets, reflecting such tax rate increases, was recognized as a reduction to Income tax expense in the fiscal year ended March 31, 202
5
.
The following table shows a reconciliation of the applicable statutory tax rate to the effective tax rate for the fiscal year ended March 31, 2026.
 
 
  
2026
 
 
  
  Amount  
 
 
  Percent  
 
 
  
(in millions of yen, expect percentages)
 
Tax at Japan national statutory tax rate
(2)
  
 
431,352
 
 
 
25.59
% 
Local taxes, net of national income tax effect
(3)
  
 
20,765
 
 
 
1.23
 
Foreign tax effects:
  
 
The United States
  
 
(21,702
) 
 
 
(1.29
) 
Other foreign jurisdictions
  
 
12,369
 
 
 
0.73
 
Effect of cross-border tax laws
  
 
2,335
 
 
 
0.14
 
Nontaxable or nondeductible items:
  
 
    
 
 
 
   
 
Noncontrolling interest income from consolidated VIEs
  
 
(33,077
) 
 
 
(1.96
) 
Others
  
 
(6,827
) 
 
 
(0.41
) 
Tax credits
  
 
(13,693
) 
 
 
(0.81
) 
Change in valuation allowance
  
 
(580
) 
 
 
(0.03
) 
Other adjustments
  
 
(31,329
) 
 
 
(1.86
) 
  
 
 
 
 
 
 
 
Total income tax expense and effective tax rate
  
 
359,613
 
 
 
21.33
% 
  
 
 
 
 
 
 
 
 
Notes:
(2)
Income taxes applicable to us in Japan are imposed by the national and local governments, and the aggregate of these taxes resulted in a combined normal effective statutory tax rate of 30.62% for each of the
 
 
fiscal years ended March 31, 2024 and 2025. MHFG used the Japanese statutory corporate income tax rate of 25.59% as the applicable national statutory tax rate in the reconciliation of the statutory tax rate to the effective tax rate for the fiscal year ended March 31, 2026. Foreign subsidiaries are subject to income taxes of the jurisdictions in which they operate, and these taxes are reflected in the effective income tax rate.
(3)
Local taxes in Tokyo made up the majority (greater than 50%) of the tax effect in this category.
Deferred tax assets and liabilities
The components of net deferred tax assets at March 31, 2025 and 2026 are as follows:
 
 
  
  2025  
 
 
  2026  
 
 
  
(in millions of yen)
 
Deferred tax assets:
  
 
Derivative financial instruments
  
 
224,074
 
 
 
408,829
 
Allowance for credit losses
  
 
288,385
 
 
 
364,516
 
Lease liabilities
  
 
158,220
 
 
 
166,026
 
Trading securities
  
 
115,783
 
 
 
92,607
 
Foreign tax credit and payments
(1)
  
 
112,412
 
 
 
87,110
 
Premises and equipment
  
 
45,797
 
 
 
52,928
 
Available-for-sale
securities
  
 
1,454
 
 
 
38,313
 
Net operating loss carryforwards
(2)(3)
  
 
151,390
 
 
 
134,675
 
Other
  
 
338,067
 
 
 
325,147
 
  
 
 
 
 
 
 
 
  
 
1,435,582
 
 
 
1,670,149
 
Valuation allowance
(1)(2)(3)
  
 
(215,626
) 
 
 
(185,857
) 
  
 
 
 
 
 
 
 
Deferred tax assets, net of valuation allowance
  
 
1,219,956
 
 
 
1,484,291
 
  
 
 
 
 
 
 
 
Deferred tax liabilities:
  
 
Investments
  
 
370,063
 
 
 
606,109
 
Prepaid pension cost and accrued pension liabilities
  
 
203,490
 
 
 
212,903
 
Right-of-use
assets
  
 
148,989
 
 
 
152,952
 
Other
  
 
188,913
 
 
 
184,537
 
  
 
 
 
 
 
 
 
Deferred tax liabilities
  
 
911,454
 
 
 
1,156,502
 
  
 
 
 
 
 
 
 
Net deferred tax assets
  
 
308,502
 
 
 
327,790
 
  
 
 
 
 
 
 
 
 
Notes:
(1)
The amount includes ¥82,572 million and ¥59,644 million related to MHBK’s foreign tax credit carryforwards as of March 31, 2025 and 2026, respectively. The amount is mainly offset by valuation allowance, and if not utilized, the amount will expire during the fiscal year ending March 31, 2027.
(2)
The amount includes ¥11,423 million and ¥1,613
million related to MHSC’s net operating loss carryforwards resulting mainly from the organizational restructuring of certain foreign subsidiaries as of March 31, 2025 and 2026, respectively. The tax effect of the net operating loss carryforwards as of March 31, 2025 is substantially offset by
¥4,408
million of valuation allowance as a result of considering all available evidence regarding sources of future taxable income including historical trends in taxable income in the preceding periods and forecasted taxable income. 
(3)
The amount includes ¥24,943 million and ¥24,852 million related to MHFG’s net operating loss carryforwards resulting mainly from intercompany capital transactions in relation to the share buyback conducted by MHSC as of March 31, 2025 and 2026, respectively. The tax effect of the net operating loss carryforwards is fully offset by ¥24,943 million and ¥24,852 million, respectively, of valuation allowance as
 
 
a result of considering all available evidence regarding sources of future taxable income including historical trends in taxable income in the preceding periods and forecasted taxable income.
MHFG 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 as of March 31, 2026.
Deferred tax assets and deferred tax liabilities within the same tax jurisdiction have been netted for presentation purposes in the consolidated balance sheets.
As of March 31, 2026, the accumulated amount of undistributed earnings that will be indefinitely reinvested and the unrecognized deferred tax liabilities related to such subsidiaries are approximately ¥580 billion and ¥68 billion, respectively.
The following table and accompanying footnotes provide a breakdown of deferred tax assets and the valuation allowance recognized in respect of net operating loss carryforwards by tax jurisdiction and by year of expiration as of March 31, 2025 and
2026
:

    
Deferred tax assets
     
Valuation allowance
    
Deferred tax assets,

net of valuation allowance
  
    
(in billions of yen)
  
2025
        
Japan
(1)
      54        (35 )      20  
The United States
      5        —        5  
The United Kingdom
(2)
      90        (90 )      —   
Others
      2        —        2  
  
 
 
     
 
 
    
 
 
  
Total
      151        (125 )      26  
  
 
 
     
 
 
    
 
 
  
2026
        
Japan
(3)
      31        (26 )     5  
The United States
      5        (1 )     4  
The United Kingdom
(2)
      98        (98 )     —   
Others
      1        —        1  
  
 
 
     
 
 
    
 
 
  
Total
      135        (125 )     10  
  
 
 
     
 
 
    
 
 
  
 
Notes:
(1)
¥25 billion of the Japan deferred tax assets of ¥54 billion is related to MHFG, which is fully offset by a valuation allowance, and will mostly expire during the fiscal year ending March 31, 2032. ¥12 billion of the Japan deferred tax assets of ¥54 billion is related to MHBK and will mostly expire during the fiscal year ending March 31, 2034.
(2)
The United Kingdom net operating loss carryforwards may be carried forward indefinitely for tax purposes.
(3)
¥25 billion of the Japan deferred tax assets of ¥31 billion is related to MHFG, which is fully offset by a valuation allowance, and will mostly expire during the fiscal year ending March 31, 2032. ¥3 billion of the Japan deferred tax assets of ¥31 billion is related to MHBK and will mostly expire during the fiscal year ending March 31, 2034.
Determination of valuation allowance
In accordance with ASC 740, when the MHFG Group determines whether and to what extent a valuation allowance is needed, the Group considers all available evidence, both positive and negative, to estimate future
 
 
taxable income. In this regard, the Group considers reversals of existing taxable temporary differences, projected future taxable income (exclusive of reversals of existing temporary differences) and qualifying
tax-planning
strategies to be possible sources of future taxable income. The Group considers the specific pattern and timing of future reversals of existing taxable and deductible temporary differences on
available-for-sale
securities and equity securities to constitute a prudent and feasible
tax-planning
strategy and strong positive evidence. The Group has the ability to control when its
available-for-sale
securities and equity securities with unrealized gains and losses are sold in order to accelerate or decelerate taxable or deductible amounts. The Group also has a long history of effecting such sales as necessary in order to utilize net operating loss carryforwards or otherwise realize deferred tax assets.
Positive evidence includes the Group’s results of operations for the current and preceding years on an overall consolidated basis and for most of the principal subsidiaries. In particular, the strong results of operations in recent years of MHFG’s principal banking subsidiaries in Japan represent positive evidence that can be objectively verified.
Negative evidence includes the existence of significant amounts of net operating loss carryforwards or cumulative losses recorded at certain entities, and the expiration of unused net operating loss carryforwards in recent years.
A valuation allowance is recorded against deferred tax assets as of the balance sheet date to the extent the Group estimates it is more likely than not that sufficient future taxable income is not available to realize such deferred tax assets. The Group has applied the consolidated taxation system from the fiscal year ended March 31, 2022 and has shifted to the Japanese Group Relief System beginning with the fiscal year ended March 31, 2023. A consolidated basis for corporate income taxes results in the reporting of taxable income or loss based upon the combined profits or losses of the parent company and its wholly-owned domestic subsidiaries. Therefore, when calculating deferred tax assets and liabilities and valuation allowance as of March 31, 2022, the Group considered the effect of the shift to the Japanese Group Relief System. The impact of the shift to the Japanese Group Relief System was not material to the consolidated financial statements. The changes in the valuation allowance are primarily due to changes in deductible temporary differences, net operating loss carryforwards and the estimated availability of future taxable income sources.
In general, a valuation allowance is recognized against deferred tax assets related to entities that have accumulated significant net operating loss carryforwards. As of March 31, 2026, the Group’s valuation allowance was primarily related to entities in Japan, the United States and the United Kingdom. The valuation allowance was partially recognized in Japan and in the United States, while the valuation allowance was fully recognized in the United Kingdom.
The Group determined whether cumulative losses were recognized by aggregating pretax
results
for the recent three years as part of the analysis of potential indicators of negative evidence. In each tax jurisdiction, certain entities recognized a cumulative loss on the basis of the most recent three years’ pretax results as of March 31, 2026. A valuation allowance was fully recognized against the deferred tax assets if the Group determined there was no positive evidence that overcame the negative evidence. As of March 31, 2026, MHFG’s securities subsidiary in the United Kingdom has come out of three-year cumulative loss position. However, it has a history of cumulative loss in prior periods. The Group evaluated the weight of both positive and negative evidence, including the subsidiary’s historically limited profitability and significant uncertainty regarding future earnings potential. Due to the uncertainty around the sustainability of earnings and absence of objectively verifiable future taxable income, the company continues to maintain a full valuation allowance for this subsidiary. MHFG and its principal banking subsidiaries in Japan did not record cumulative losses in the periods presented.
 
 
Change in valuation allowance
The following table presents a roll-forward of the valuation allowance for the fiscal years ended March 31, 2024, 2025 and 2026:
 
    
  2024  
    
  2025  
    
  2026  
  
    
(in millions of yen)
  
Balance at beginning of fiscal year
      198,800       233,991       215,626  
Changes that directly affected Income tax expense
      (38,055 )      (538 )      (5,100 )
Changes that did not affect Income tax expense:
       
Expiration of net operating loss carryforwards
      —        —        —   
Others
      73,246       (17,826 )      (24,668 )
 
  
 
 
    
 
 
    
 
 
  
Total
      73,246       (17,826 )      (24,668 )
  
 
 
    
 
 
    
 
 
  
Balance at end of fiscal year
      233,991       215,626       185,857  
  
 
 
    
 
 
    
 
 
  
The decrease in the fiscal year ended March 31, 2024 of ¥38,055 million in the valuation allowance that directly affected Income tax expense was primarily related to a decrease of the realizability of deferred tax assets of MHFG and its subsidiaries. The increase in the fiscal year ended March 31, 2024 of ¥73,246 million in others was primarily related to an increase in the valuation allowance that is fully recognized against the MHBK’s foreign tax credit carryforwards.
The decrease in the fiscal year ended March 31, 2025 of ¥538 million in the valuation allowance that directly affected Income tax expense was primarily related to a decrease of the realizability of deferred tax assets of MHFG and its subsidiaries. The decrease in the fiscal year ended March 31, 2025 of ¥17,826 
million in others was primarily related to a decrease in the valuation allowance that is fully recognized against the MHBK’s foreign tax credit carryforwards. 
The decrease in the fiscal year ended March 31, 2026 of ¥5,100 million in the valuation allowance that directly affected Income tax expense was primarily related to a decrease of the realizability of deferred tax assets of MHFG and its subsidiaries. The decrease in the fiscal year ended March 31, 2026 of ¥24,668 million in others was primarily related to a decrease in the valuation allowance that is mainly recognized against the MHBK’s foreign tax credit carryforwards.
Net operating loss carryforwards
At March 31, 2026, the MHFG Group had net operating loss carryforwards totaling ¥416 billion. These carryforwards are scheduled to expire as follows:
 
    
Net operating loss

carryforwards
 (1)(3)
  
    
(in billions of yen)
  
Fiscal year ending March 31:
   
2027
      —   
2028
      —   
2029
      —   
2030
      —   
2031
      —   
2032 and thereafter
(2)
      415  
  
 
 
  
Total
           416  
  
 
 
  
 
 
 
Notes:    
(1)
Net operating loss carryforwards related to Japanese local taxes at MHFG amounted to
 ¥518 
billion (tax-effected
¥25 billion)
as of March 31, 2026 and are not included in the table. The net operating loss carryforwards are fully offset by valuation allowance and will mostly expire during the fiscal year ending
March 31, 2032.    
(2)
Including the net operating loss carryforwards which may be carried forward indefinitely in the United Kingdom.
(3)
Net operating loss carryforwards related to Japanese local taxes at MHBK amounted to
¥80 
billion (tax-effected
¥3
billion) as of March 31, 2026 and are not included in the table. The net operating loss carryforwards will mostly expire during the fiscal year ending
March 31, 2034.
Uncertainty in income tax
The following table is a roll-forward of unrecognized tax benefits for the fiscal years ended March 31, 2024, 2025 and 2026:
 
    
  2024  
    
  2025  
    
  2026  
  
    
(in millions of yen)
  
Total unrecognized tax benefits at beginning of fiscal year
      7,043       7,639       4,766  
  
 
 
    
 
 
    
 
 
  
Gross amount of increases (decreases) related to positions taken during prior years
      205       (1,132 )      130  
Gross amount of increases related to positions taken during the current year
      1,080       585       678  
Amount of decreases related to settlements
      (1,633 )      (2,232 )      (522 )
 
Foreign exchange translation
      944       (94 )      331  
  
 
 
    
 
 
    
 
 
  
Total unrecognized tax benefits at end of fiscal year
      7,639       4,766           5,383  
  
 
 
    
 
 
    
 
 
  
The total amount of unrecognized tax benefits including ¥3,014 million, ¥1,477 million and ¥1,746 million of interest and penalties was ¥7,639 million, ¥4,766 million and ¥5,383 million at March 31, 2024, 2025 and 2026, respectively, which would, if recognized, affect the Group’s effective tax rate. The Group classifies interest and penalties accrued relating to unrecognized tax benefits as Income tax expense.
The MHFG Group is currently subject to ongoing tax audits in some jurisdictions. The oldest years open to tax audits in Japan, the United States and the United Kingdom are 2017, 2011 and 2020, respectively.