AFL · 10-Q · 2026Q2 · Full report

Income Tax Rate Changes

AFLAC INC · 2026-08-07 · Importance 46 · Surprise 56

The combined effective income tax rate fell to 17.0% in the second quarter of 2026 from 27.0% in the second quarter of 2025. For the first six months, the rate decreased to 16.9% from 35.0%. The lower rates reduced tax expense relative to pretax earnings and contributed to the year-over-year increase in reported net income. The rate differs from the U.S. statutory rate primarily because foreign-currency translation gains and losses on Aflac Japan’s U.S.-dollar investments in the Delaware Statutory Trust are excluded.

Key facts

• The Company's combined U.S. and Japanese effective income tax rate on pretax earnings was 16.9% for the six-month period ended June 30, 2026, compared with 35.0% for the same period in 2025. source
• Tax credits on these federal investments were $5 and $9 for the three-month periods and $10 and $16 for the six-month periods ended June 30, 2026 and 2025, respectively, reported as an income tax benefit in the consolidated statements of earnings. source
• The Company's combined U.S. and Japanese effective income tax rate on pretax earnings was 17.0% for the three-month period ended June 30, 2026, compared with 27.0% for the same period in 2025. source