What this is
An upper bound on tax Nintendo has set aside against The Pokémon Company’s retained profits: the year-to-March-2026 rise of ¥16.8bn was at most 20% of affiliate profit.
How it’s built
- Nintendo’s tax provision on undistributed profit of subsidiaries and affiliates rose from ¥38.2bn to ¥55.0bn: ¥16.8bn, or 20.2% of its ¥82.8bn affiliate profit.
- Compared with the tax on a full payout of The Pokémon Company’s retained profit: Nintendo’s 32% share is ¥132.5bn; at a 30.6% rate with half the dividend tax-exempt, about ¥20.3bn.
What we assumed
- All of the provision could be The Pokémon Company’s.Nintendo does not split it, so every Pokémon rate here is an upper bound. At the dividend tax rate, the Pokémon part is at most about ¥35bn.
- Half of Nintendo’s dividends from The Pokémon Company would be tax-exempt.Japanese rules exempt half of dividends from holdings of Nintendo’s size, as the research reads them.
Sanity check
Had The Pokémon Company paid out 30% of profits like peers, Nintendo would have received about ¥66bn more over 2018–26. Why it does not is set by an owners’ agreement the research cannot see.
Where it comes from
Our calculation from other figures in the trainer’s notes:
- FiledTax Nintendo has set aside for the day its subsidiaries and affiliates pay out their retained profits, at 31 March 2026¥55bn
- Filed連結 DTL: 関係会社留保利益 (deferred tax liability on undistributed earnings of 関係会社), year to March 2025 (Apr 2024–Mar 2025)−¥38.2bn
- FiledNintendo’s share of profit from equity-method affiliates, chiefly its 32% of The Pokémon Company, in the year to March 2026¥82.8bn
- ReportedNintendo’s holdings in unconsolidated subsidiaries and affiliates, March 2017¥25.3bn
- ReportedThe Pokémon Company Tokyo company’s two dividends since 2017 and Nintendo’s share¥3.3–3.8bn
- EstimateThe Pokémon Company's part of Nintendo's ¥82.8bn share of affiliate profit for the year to March 2026¥80.9–84.2bn
Show the working
- DTL year to March 2026: ¥54,978m
- DTL year to March 2025: ¥38,215m
- DTL increase: ¥16,763m
- Increase over year to March 2026 pickup: 20.2%
- Increase over TPC share of pickup: 19.9 to 20.7%
- Statutory tax on full retained earnings payout at 50pct exclusion: ¥20.3bn
- 54,978 − 38,215 = 16,763
- /82,792 = 20.2%
- 233,063 − 3,319..3,829 = 229,744..229,234
- 54,978/that = 23.9–24.0%
- 16,763/84,200..80,900 = 19.9–20.7%
- 0.32 × 413,917 = 132,453
- × 20.2%..23.98% = ¥26.8–31.8bn
- statutory 0.5 × 30.6% × 132,453 = 20.3bn
- DTL cap 0.153 × 229,744 = 35.2bn
- 218,497 − 11,960 = 206,537