Canon 2014 Annual Report Download - page 71

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69
C
ORPORATE
S
TRUCTUREBU
S
INE
SS
S
EGMEN
T
F
INANCIAL
S
ECTIO
N
CORPORATE DAT
A
STRATEGY
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 38% for the years
ended December 31, 2014 and 2013, respectively, and approxi-
mately 40% for the year ended December 31, 2012.
Amendments to the Japanese tax regulations were enact-
ed into law on November 30, 2011. As a result of these
amendments, the statutory income tax rate was reduced
from approximately 40% to 38% effective from the year
ended December 31, 2013, and to approximately 35% effec-
tive from the year ending December 31, 2016. On March 20,
2014, further amendments were enacted into law, and the
reduction of the statutory income tax rate to approximately
35% became effective one year earlier, from the year ending
December 31, 2015. Consequently, the statutory income tax
rate utilized for deferred tax assets and liabilities which were
expected to be settled or realized in the period from January
1, 2015 is approximately 35%. The adjustments of deferred
tax assets and liabilities for this further amendment to tax
law, which were reflected in income taxes for the year ended
December 31, 2014, were not material.
Years ended December 31 Millions of yen
Japanese Foreign Total
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
2012: Income before income taxes ¥ 257,640 ¥ 84,917 ¥ 342,557
Income taxes:
Current ¥ 73,573 ¥ 29,052 ¥ 102,625
Deferred 13,900 (6,413) 7,487
¥ 87,473 ¥ 22,639 ¥ 110,112
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:
Net deferred income tax assets and liabilities are included in the accompanying consolidated balance sheets under the
following captions:
Years ended December 31 2014 2013 2012
Japanese statutory income tax rate 38.0% 38.0% 40.0%
Increase (reduction) in income taxes resulting from:
Expenses not deductible for tax purposes 0.7 0.9 0.8
Income of foreign subsidiaries taxed at lower than
Japanese statutory tax rate (3.7) (3.3) (4.3)
Tax credit for research and development expenses (5.0) (5.4) (5.7)
Change in valuation allowance (0.5) 0.2 (1.7)
Other 1.3 0.7 3.0
Effective income tax rate 30.8% 31.1% 32.1%
December 31 Millions of yen
2014 2013
Prepaid expenses and other current assets ¥ 61,943 ¥ 61,902
Other assets 117,636 103,539
Other current liabilities (3,456) (3,621)
Other noncurrent liabilities (80,459) (63,129)
¥ 95,664 ¥ 98,691