Nissan 2007 Annual Report Download - page 66

»FINANCIAL SECTION
Nissan Annual Report 2006-2007
64
13. INCOME TAXES
Income taxes in Japan applicable to the Company and its domestic consolidated subsidiaries consist of corporation tax, inhabitants’ taxes and
enterprise tax, which, in the aggregate, resulted in a statutory rate of approximately 41% for 2006, 2005 and 2004. Income taxes of the foreign
consolidated subsidiaries are based generally on the tax rates applicable in their countries of incorporation.
The effective tax rates reflected in the consolidated statements of income for the years ended March 31, 2007, 2006 and 2005 differ from
the statutory tax rate for the following reasons:
2006 2005 2004
For the years ended Mar. 31, 2007 Mar. 31, 2006 Mar. 31, 2005
Statutory tax rate.................................................................................................................................................................................................................... 40.6% 40.6% 40.6%
Effect of:
Decrease in valuation allowance................................................................................................................................................................ (0.0) (1.0) (1.9)
Different tax rates applied to foreign subsidiaries....................................................................................................................... (5.4) (3.1) (2.7)
Tax credits..................................................................................................................................................................................................................... (2.8) (2.7) (1.5)
Equity in earnings of unconsolidated subsidiaries and affiliates...................................................................................... (1.2) (1.9) (1.9)
Other.................................................................................................................................................................................................................................. (0.8) (0.5) (0.1)
Effective tax rates.................................................................................................................................................................................................................. 30.4% 31.4% 32.5%
The significant components of deferred tax assets and liabilities at March 31, 2007 and 2006 were as follows:
Thousands of
Millions of yen U.S. dollars
2006 2005 2006
As of Mar. 31, 2007 Mar. 31, 2006 Mar. 31, 2007
Deferred tax assets:
Net operating loss carryforwards................................................................................................................................ ¥ 56,141 ¥ 20,343 $ 475,771
Accrued retirement benefits............................................................................................................................................ 128,515 157,319 1,089,110
Accrual for warranty costs ................................................................................................................................................ 70,364 67,461 596,305
Other................................................................................................................................................................................................... 499,960 454,878 4,236,950
Gross deferred tax assets.......................................................................................................................................................... 754,980 700,001 6,398,136
Valuation allowance......................................................................................................................................................................... (72,601) (38,880) (615,263)
Total deferred tax assets ............................................................................................................................................................ 682,379 661,121 5,782,873
Deferred tax liabilities:
Reserves under Special Taxation Measures Law, etc. .............................................................................. (451,404) (440,939) (3,825,458)
Difference between cost of investments and
their underlying net equity at fair value ............................................................................................................... (78,917) (81,634) (668,788)
Unrealized holding gain on securities...................................................................................................................... (4,166) (14,828) (35,305)
Other................................................................................................................................................................................................... (182,082) (155,465) (1,543,068)
Total deferred tax liabilities ....................................................................................................................................................... (716,569) (692,866) (6,072,619)
Net deferred tax liabilities........................................................................................................................................................... ¥ (34,190) ¥ (31,745) $ (289,746)