Eisai Co., Ltd. (“the Company”) and its affiliates (collectively referred to as “the Group”)
Fiscal year ended March 31, 2023
Notes to Consolidated financial statements (Income taxes)(1) Income taxes
Breakdown of income taxes(Unit: Millions of Yen)
Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2022

Income taxes – current (Note 1)

13,282

13,856

Income taxes – deferred (Note 2)(25,106)(5,115)(11,824)

8,741

Total(Note 1)

Movements of liabilities due to valuation of uncertain tax positions are included in “income taxes – current” ineach fiscal year.
(Note 2) For the fiscal year ended March 31, 2023, as part of the Group’s capital policy to optimize the global allocation ofcash in the Group, the Company received a repayment of paid-in capital of ¥63,622 million from its consolidated
U.S. subsidiary, Eisai Corporation of North America. As a result, the Company recognized losses on transferringof investments in subsidiaries for tax purposes and income taxes decreased by ¥21,588 million.
Reconciliation between the statutory tax rate and the effective income tax rate
The effective tax rate represents ratio of income taxes to profit before income taxes. The Company has been mainly
imposed corporate income taxes, resident taxes and business taxes, then the statutory tax rate based on these items
is 30.5%. Overseas subsidiaries have been imposed corporate income taxes in each jurisdiction.
(Unit: %)Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2022

Statutory tax rate

30.5

30.5

Repayment of paid-in capital from U.S. subsidiary(48.0)－Tax rate differences in subsidiaries

(8.6)

(5.9)

Tax credit for experiment and research expenses

(4.1)

(8.0)

Uncertain tax positions

(1.0)

0.4

(0.3)

0.2

Tax credit

(0.0)

(1.2)

Valuation allowances

0.6

(0.1)

Incomes taxes in the past

0.6

0.6

0.8

0.0

Foreign tax deductible adjustment

1.4－Others

1.8(0.5)(26.3)

16.1

Expenses not permanently deductible for income
tax purposes, such as entertainment expenses

Withholding

tax

relatedwithdividends

fromsubsidiaries and others

Effective tax rate-1-

(2) Deferred tax assets and deferred tax liabilitiesBreakdown of deferred tax assets and deferred tax liabilities
The Group applies the exception to recognizing and disclosing information about deferred tax assets and deferred
tax liabilities related to income taxes arising from tax law enacted or substantively enacted to implement the Pillar
Two model rules published by the Organization for Economic Co-operation and Development (OECD).
For the fiscal year ended March 31, 2023
(Unit: Millions of Yen)
As ofApril 1, 2022

Recognizedthrough P&L

Recognizedthrough OCI

As ofMarch 31, 2023

Deferred tax assets
Entrusted R&D expenses

15,978(1,245)－

14,733

Tax credit for experiment and researchexpenses

28,784(5,179)－23,605Retirement benefit liabilities

3,866

(204)

(439)

3,223

Depreciation and amortization

2,501

(107)

－

2,394

Accrued bonuses

4,740

(580)

－

4,160

Deferred charges for tax purposes

9,480

8,497

－

17,977

Unrealized gain on inventories

16,431(753)－

15,678Net operating loss carryforward

2,462

27,878－30,340

Others

17,689(1,024)－

16,665Sub-total

101,932

27,284(439)

128,776

Intangible assets

14,116(1,254)－12,862

Depreciation and amortization

4,90026－

4,926

Financial assets measured at fair value
through OCI

5,819

－

1,549

7,368

Others

959

733

－

1,691

Sub-total

25,793

(495)

1,549

26,84876,13827,778(1,988)

101,928

Deferred tax liabilities

Balance (Note 1)(Note 1)The difference between the balance recognized through P&L and income taxes – deferred is mainly due tomovements of liabilities due to valuation of uncertain tax positions which are offset with deferred tax assets inconsolidated statement of financial position and included in income taxes – current in consolidated statement ofincome, and movements of foreign currencies.

-2-For the fiscal year ended March 31, 2022
(Unit: Millions of Yen)
As ofApril 1, 2021

Recognizedthrough P&L

Recognizedthrough OCI

As ofMarch 31, 2022

Deferred tax assets
16,334(356)－

15,97828,69689－

28,784Retirement benefit liabilities

3,187

203

476

3,866

Depreciation and amortization

2,718

(217)

－

2,501

Accrued bonuses

3,093

1,647

－

4,740

Deferred charges for tax purposes

9,818(338)－

9,480

Unrealized gain on inventories

13,071

3,360－

16,431

Net operating loss carryforward

914

1,548

－

2,462

Others17,408311(30)

17,689Sub-total

95,2406,246

446

101,932

Intangible assets

19,054(4,938)－

14,116

Depreciation and amortization

1,433

3,467

－

4,900

6,551

－

(732)

5,819

Others1,150(192)－959

Sub-total

28,187(1,662)(732)

25,79367,052

7,908

1,178

76,138

Entrusted R&D expenses
Tax credit for experiment and researchexpenses

Deferred tax liabilities

Financial assets measured at fair value
through OCIBalance (Note 1)(Note 1)The difference between the balance recognized through P&L and income taxes – deferred is mainly due tomovements of liabilities due to valuation of uncertain tax positions which are offset with deferred tax assets inconsolidated statement of financial position and included in income taxes – current in consolidated statement ofincome, and movements of foreign currencies.

Deferred tax assets and deferred tax liabilities(Unit: Millions of Yen)
As of March 31, 2023
Deferred tax assets
Deferred tax liabilities
Balance-3-

As of March 31, 2022

102,592

76,622664

483

101,928

76,138

(3) Deferred tax assets not recognized in the consolidated financial statements
The Group does not recognize deferred tax assets when it is not likely to arise sufficient taxable income in the future
period to utilize the benefit.
Breakdown of deferred tax assets not recognized in the consolidated financial statements(Unit: Millions of Yen)
As of March 31, 2023
Deductible temporary difference

4,326

3,765

Net operating loss carryforward (Note 1)

13,61912,223

Tax credit carryforward (Note 2)

5,506

5,703

23,451

21,691

Total(Note 1)

As of March 31, 2022

Breakdown by timing of expiration of net operating loss carryforward on which deferred tax assets are notrecognized in the consolidated statements(Unit: Millions of Yen)
As of March 31, 2023

As of March 31, 2022－－

Over one year, within five years

1,703

1,272

Over five years

11,915

10,951

13,61912,223

Within one year

Total

(Note 2)

Breakdown by timing of expiration of tax credit carryforward on which deferred tax assets are not recognized inthe consolidated statements(Unit: Millions of Yen)
As of March 31, 2023

As of March 31, 2022

Within one year－

145

Over one year, within five years

－335

5,506

5,223

5,506

5,703

Over five years
Total(4) Temporary differences regarding investments in subsidiaries on which deferred tax liabilities are not recognized in
the consolidated statement
For the fiscal year ended March 31, 2023, the amount of temporary differences regarding investments in subsidiaries
on which deferred tax liabilities are not recognized in the consolidated statements is ¥523,581 million (¥435,779 million
for the fiscal year ended March 31, 2022). The Group does not recognize deferred tax liabilities on the temporary
differences when the Company can control the timing of dissolution of the temporary differences and it is likely not tobe dissolved within foreseeable period.

-4-