PwC Asia Pacific Insurance Tax News is a periodic publication that offers insights into trends and developments in insurance and taxation.
Asia is a diverse place. Some countries like Australia, New Zealand, Korea and Japan have matured insurance markets and relatively high insurance penetration rates. Yet others, like Vietnam, Indonesia and Papua New Guinea (PNG) are still in the early stages of insurance development. Countries like China and India are only cautiously opening its doors to foreign insurers. All these mean a varying development of regulations and tax rules for insurers. Across Asia, we continue to see accounting, regulatory and tax reforms.
In the fourth edition of our Asia Pacific Insurance Tax News, we will share with you some of these tax developments, changes and challenges. This year's edition is another bumper issue with 16 articles authored by our specialists from fifteen Asia Pacific countries, including first time contributors PNG and Vietnam.
In the aftermath of the global financial crisis, the wave of regulatory and accounting changes has continued unabated in the Asia Pacific. More and more countries are adopting a risk-based capital framework while at the same time adopting or laying down a roadmap for the adoption of IFRS (International Financial Reporting Standards). While all this convergence of global best practice is good for the industry, the differences in book-tax treatments have created major headaches from a tax perspective.
Tax reforms and other tax developments (both in direct taxation and indirect taxation) also continue in a number of countries in Asia Pacific with consequences to the insurance industry. More ever than before, insurers need to keep abreast of the changing environment and proactively manage their tax risks and challenges. In this bumper issue of Asia Pacific Insurance Tax News, our specialists from 13 countries will share with you some of these tax developments, changes and challenges.
Insurance is a unique business and unique tax laws are often required to cater to the peculiarities of insurance business. Yet most lawmakers and tax authorities find the business hard to understand. It has been made more difficult by the rapid and widespread implementation of global regulatory and accounting changes as most Asia Pacific countries attempt to follow global best practice.
The result is often new tax regimes being introduced with unintended tax consequences. And even when new tax laws are issued to fix old issues, they either take too long to happen or sometimes end up getting it wrong. It is therefore important that insurers stay abreast of tax changes and actively manage the tax risks and challenges they face. In this issue of Asia Pacific Insurance Tax News, our team of specialists will share with you some of these tax changes and challenges in Asia Pacific today.
The Asia Pacific region is an exciting place to be. As set out in Swiss Re’s publication sigma 03/2008, based on the results of its 2007 World Insurance Survey, the Asia Pacific region is home to three of the top ten insurance countries in the world by total premium volume. Japan was ranked third, Korea seventh and China tenth. Asia Pacific is also home to India and China, the two most populous countries in the world. Add on to that mix the low insurance penetration rates in countries like Indonesia and Vietnam, and you’ll find that Asia Pacific must be one of the most desirable insurance regions in the world today.
Despite its attraction, the Asia Pacific region is a minefield where taxation is concerned. Quite often, we find that the tax laws are not designed to cater to the special situations of insurers. We also find tax laws struggling to keep up with the innovation and developments in the industry. The rapid proliferation and updates around regulations and accounting standards also pose additional tax challenges.
This is the first issue of the PricewaterhouseCoopers (PwC) Asia Pacific Insurance Tax News. Written by PwC specialists from seven countries, they will share some of the tax issues and challenges facing the insurance industry in their respective markets today.