2025 Income Tax for Insurers Under PER-5/PJ/2026

PER-5/PJ/2026 took effect on 20 April 2026. Its preamble refers to the change in the insurance contract standard effective from 1 January 2025, which altered the principles of recognition, measurement, presentation and disclosure.

Article 3(2)(a) sets income and expense recognition for tax year 2025 on the principles of the insurance contract standard in force in 2024. The 2025 commercial financial statements therefore use PSAK 117, while taxable income uses the earlier basis.

Article 2 covers taxpayers keeping books on insurance contracts, including reinsurance contracts under the definition in Article 1. Article 2(2) also covers books kept under laws on recognising income and expenses for insurance contracts.

Which statements are used

Article 4(1) sets the basis of calculation: 2025 financial statements prepared on the earlier basis, plus the income tax rules in force, including PMK 81/PMK.03/2009 on reserves. Article 4(2) binds taxpayers filing financial statements with the Financial Services Authority: the calculation is based on the statements filed with it.

The 2025 annual return attaches the audited statements using PSAK 117, the statements on the earlier basis, and other required information and documents.

Follow-up work

Returns filed before this regulation was issued should be checked against Articles 3 and 4. If there is a difference, the correction route follows PER-11/PJ/2025 as amended by PER-12/PJ/2026.

Differences between the PSAK 117 basis and the tax basis should also be mapped for deferred tax. Keep the reconciliation by contract line, as a tax examiner will compare two sets of statements attached to the same return.