Ministry of Finance Issues Announcement on the Tax Treatment of Enterprises Regarding the Conversion of Insurance Contract Standards.

The announcement pointed out that for enterprises that implement the Insurance Contract Standard for the first time in the fiscal year 2025 and earlier, when calculating corporate income tax, starting from the fiscal year 2026, the Insurance Contract Standard will be used as the basis, and tax adjustments will be made and corporate income tax will be calculated in accordance with current regulations. The cumulative impact of retained earnings generated by the first-time implementation of the Insurance Contract Standard by an enterprise will be included in the taxable income for the fiscal year 2026 based on the pre-tax amount or evenly distributed over five fiscal years starting from 2026. Enterprises can choose between the two methods, and once a choice is made, it cannot be changed. For enterprises that implement the Insurance Contract Standard for the first time in the fiscal year 2026 and later, when calculating corporate income tax, starting from the first implementation year, the Insurance Contract Standard will be used as the basis, and tax adjustments will be made and corporate income tax will be calculated in accordance with current regulations.