Brother International 2014 Annual Report Download - page 50

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49
Reconciliation between the normal effective statutory tax rate and the actual effective tax rate reflected in the accompanying consolidated statement of income for the
year ended March 31, 2014 was as follows:
2014
Normal effective statutory tax rate 37.70%
Lower income tax rates applicable to income in certain foreign countries (9.38)
Expenses not deductible for income tax purposes 4.60
Net change in valuation allowance 3.95
Undistributed earnings of foreign subsidiaries 3.81
Income taxes for previous years 1.93
Revenues not recognized for income tax purposes (1.30)
Effect of a change in statutory tax rate 1.02
Tax credit for R&D expenses (1.00)
Tax sparing credit (0.46)
Other – net (0.15)
Actual e ective tax rate 40.72%
Since the difference between the normal effective statutory tax rate and the actual effective tax rate was not significant, a reconciliation was not presented for the year
ended March 31, 2013.
New tax reform laws enacted in 2014 in Japan changed the normal effective statutory tax rate for the fiscal year beginning on or after April 1, 2014, from approximately
38% to 35%. The effect of this change was to decrease deferred tax assets in the consolidated balance sheet as of March 31, 2014, by ¥399 million ($3,874 thousand) and to
increase income taxes-deferred in the consolidated statement of income for the year then ended by ¥343 million ($3,330 thousand).
14. R&D Costs
R&D costs charged to income were ¥40,137 million ($389,680 thousand) and ¥37,514 million for the years ended March 31, 2014 and 2013, respectively.
15. Leases
(As lessee)
The minimum rental commitments under noncancellable operating leases were as follows:
Millions of Yen
Thousands of
U.S. Dollars
2014 2013 2014
Operating leases:
Due within one year ¥ 2,128 ¥ 1,597 $ 20,660
Due after one year 8,696 8,453 84,427
Total ¥ 10,824 ¥ 10,050 $ 105,087
Brother Industries, Ltd. and Consolidated Subsidiaries
Year ended March 31, 2014
Notes to Consolidated Financial Statements