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CANON ANNUAL REPORT 2015 69
STRATEGY BUSINESS SEGMENT CORPORATE STRUCTURE FINANCIAL SECTION CORPORATE DATA
The Company and its domestic subsidiaries are subject to a
number of income taxes, which, in the aggregate, represent a
statutory income tax rate of approximately 35% for the year
ended December 31, 2015 and approximately 38% for the
years ended December 31, 2014 and 2013, respectively.
Amendments to the Japanese tax regulations were enacted
into law on March 31, 2015. As a result of these amendments,
the statutory income tax rate will be reduced from approxi-
mately 35% to 33% effective from the year beginning January
1, 2016, and to approximately 32% effective from the year
beginning January 1, 2017 thereafter. Consequently, the stat-
utory income tax rate utilized for deferred tax assets and lia-
bilities expected to be settled or realized in the period from
January 1, 2016 to December 31, 2016 is approximately
33% and for periods subsequent to December 31, 2016 the
rate is approximately 32%. The adjustments of deferred tax
assets and liabilities for this change in the tax rate amounted
to ¥6,456 million and have been reflected in income taxes
in the consolidated statement of income for the year ended
December 31, 2015.
Years ended December 31 Millions of yen
Japanese Foreign Total
2014: Income before income taxes ¥ 277,041 ¥ 106,198 ¥ 383,239
Income taxes:
Current ¥ 83,221 ¥ 25,850 ¥ 109,071
Deferred 6,796 2,133 8,929
¥ 90,017 ¥ 27,983 ¥ 118,000
2013: Income before income taxes ¥ 251,351 ¥ 96,253 ¥ 347,604
Income taxes:
Current ¥ 75,134 ¥ 16,163 ¥ 91,297
Deferred 4,005 12,786 16,791
¥ 79,139 ¥ 28,949 ¥ 108,088
Net deferred income tax assets and liabilities are included in the accompanying consolidated balance sheets under the follow-
ing captions:
Years ended December 31 2015 2014 2013
Japanese statutory income tax rate 35.0% 38.0% 38.0%
Increase (reduction) in income taxes resulting from:
Expenses not deductible for tax purposes 0.8 0.7 0.9
Income of foreign subsidiaries taxed at lower
than Japanese statutory tax rate (2.9) (3.7) (3.3)
Tax credit for research and development expenses (4.8) (5.0) (5.4)
Change in valuation allowance (0.4) (0.5) 0.2
Effect of enacted changes in tax laws and rates on Japanese tax 1.9 0.8 —
Other 3.8 0.5 0.7
Effective income tax rate 33.4% 30.8% 31.1%
December 31 Millions of yen
2015 2014
Prepaid expenses and other current assets ¥ 55,108 ¥ 61,943
Other assets 113,687 117,636
Other current liabilities (2,682) (3,456)
Other noncurrent liabilities (96,243) (80,459)
¥ 69,870 ¥ 95,664
A reconciliation of the Japanese statutory income tax rate and the effective income tax rate as a percentage of income before
income taxes is as follows: