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Notice on Tax Protection Issues of Insurance Protection Fund

Source: Ministry of Finance Time: 2018-05-08

Finance and Taxation (2018) No. 41

Provinces, autonomous regions, municipalities directly under the Central Government, cities with separate planning, the State Administration of Taxation, the local taxation bureau, the Finance Bureau of the Xinjiang Production and Construction Corps:

In order to support the development of insurance protection funds and enhance the ability of the industry to prevent risks, the tax policy issues of insurance protection funds are clarified as follows:

I. The following incomes obtained by China Insurance Protection Fund Co., Ltd. (hereinafter referred to as the Insurance Protection Fund Company) in accordance with the “Administrative Measures for Insurance Protection Funds” are exempt from corporate income tax:

1. Insurance protection funds paid by domestic insurance companies in accordance with law;

2. Compensated income obtained from the liquidation of assets by a revocation or bankruptcy insurance company and recovery from the responsible parties, and income from property transfers obtained from the risk disposal of insurance companies according to law;

3. Accept donation income;

4. Interest income from bank deposits;

5. Interest income on purchases of government bonds, bonds issued by central banks, central enterprises and central financial institutions;

6. Income from the use of other funds approved by the State Council.

2. The following taxable certificates of insurance protection fund companies are exempt from stamp duty:

1. Newly established fund books;

2. The property right transfer document signed during the risk disposal and bankruptcy rescue of the insurance company;

3. A reloan contract with the People's Bank of China during the risk disposal of insurance companies;

4. A property insurance contract signed with the insurance company based on the insurance protection fund's own property and the received compensated assets;

Stamp tax shall be levied on other parties who have signed the above-mentioned document of transfer of property rights or taxable contract with the insurance protection fund company in accordance with the regulations.

3. This notice shall be implemented from January 1, 2018 to December 31, 2020. The Circular of the Ministry of Finance and the State Administration of Taxation on Issues Concerning Tax Policies for Insurance Protection Funds (Caishui [2016] No. 10) was also repealed.

Ministry of Finance and State Administration of Taxation

April 27, 2018

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