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<Research>Citi Foresees Tax Standard Conversion to Have One-off Impact on CN Insurers
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China's Ministry of Finance and State Administration of Taxation recently issued an announcement regarding the handling of corporate income tax in relation to the conversion of insurance contract standards, according to a Citi research report. Since listed insurers have adopted IFRS 17 at the beginning of 2023, it is expected that they will need to reflect the one-off impact on retained earnings upon first adoption of this standard, as well as the tax differences between the new and old standards from 2023 to 2025. These adjustments can be fully reflected in the FY26 or spread evenly over five fiscal years starting this year. Citi estimates that the extent of the tax impact will depend on several factors, including the tax impact of changes in retained earnings upon first adoption of the new regulations, differences between the new and old standards from 2023 to 2025, expected trends in net profit for 2026 and the next five years, and the amount and eligibility of deferred tax assets. The broker believes it to be a one-off impact only. AAStocks Financial News |
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