Omron 2005 Annual Report Download - page 68

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Normal Japanese statutory rates............................................................................
Increase (decrease) in taxes resulting from:
Permanently non-deductible items .....................................................................
Tax credit for research and development expenses...........................................
Losses of subsidiaries for which no tax benefit was provided ..........................
Tax loss on sale of subsidiary .............................................................................
Difference in subsidiaries’ tax rates....................................................................
Change in the valuation allowance .....................................................................
Effects of enacted change in tax rates ...............................................................
Other, net ............................................................................................................
Effective tax rates ............................................................................................
42.0%
7.7
—
38.7
(33.0)
(14.9)
2.9
32.7
7.1
83.2%
2003
42.0%
1.0
—
1.0
—
(0.6)
(0.1)
0.3
(0.3)
43.3%
2004
41.0%
3.0
(3.4)
1.5
—
(0.9)
0.9
—
0.0
42.1%
2005
The effective income tax rates of the Companies differ from the normal Japanese statutory rates as follows for the years ended March 31:
The Company and its domestic subsidiaries are subject to a num-
ber of taxes based on income, which in the aggregate resulted in
a normal tax rate of approximately 41.0% in 2005, and 42.0% in
2004 and 2003.
An amendment to Japanese tax regulations was enacted
into law on March 31, 2003. As a result of this amendment, the
normal income tax rate was reduced from 42.0% to 41.0% effec-
tive April 1, 2004. Deferred income tax assets and liabilities as of
March 31, 2003 and 2004 were measured at appropriate tax rates
considering the period the deferred tax asset or liability would be
realized. The effect was an increase in the provision for income
taxes of ¥127 million and ¥1,549 million for the year ended March
31, 2004 and 2003, respectively.
The approximate effect of temporary differences and tax credit and loss carryforwards that gave rise to deferred tax balances at March
31, 2005 and 2004 were as follows:
Inventory valuation .......................................................................
Accrued bonuses and vacations ..................................................
Termination and retirement benefits............................................
Enterprise taxes............................................................................
Intercompany profits ....................................................................
Marketable securities ...................................................................
Property, plant and equipment.....................................................
Allowance for doubtful receivables..............................................
Minimum pension liability adjustment .........................................
Other temporary differences........................................................
Tax credit carryforwards...............................................................
Operating loss carryforwards.......................................................
Subtotal ........................................................................................
Valuation allowance......................................................................
Total ..........................................................................................
Millions of yen
2005 2004
Deferred
tax liabilities
¥—
—
—
—
—
7,721
—
47
—
2,578
—
—
10,346
—
¥10,346
Deferred
tax assets
¥ 3,215
5,432
14,942
676
2,349
—
1,683
1,249
32,020
10,641
4,205
6,185
82,597
(7,118)
¥75,479
Deferred
tax liabilities
¥—
—
—
—
—
7,954
—
42
—
3,814
—
—
11,810
—
¥11,810
Deferred
tax assets
¥ 2,735
5,206
9,493
1,329
2,790
—
1,410
3,005
29,161
12,267
4,411
4,714
76,521
(7,268)
¥69,253