British energy major BP said Tuesday that it expected to take a $1.5-billion (1.2-billion-euro) hit from US President Donald Trump's tax reforms.
‘The lowering of the US corporate income tax rate to 21 percent requires revaluation of BP's US deferred tax assets and liabilities,’ the company said in a statement.
‘The current estimated impact of this will be a one-off non-cash charge to the group income statement of around $1.5 billion that will impact BP's fourth quarter 2017 results.’
However, the energy giant cautioned that longer-term earnings would be ‘positively impacted’ by the US changes.
BP is scheduled to unveil its fourth-quarter figures on February 6.
Trump has signed into law a sweeping overhaul of the US tax code, in what was his first major legislative victory since taking office nearly a year ago.
The measure is expected to boost corporate profits of banks and other companies over the medium and long term by lowering the corporate tax rate to 21 percent from 35 percent.
However, several large corporations have signalled that the law will result in a short-term hit on earnings repatriated from overseas. The reform taxes these earnings at 15.5 percent on cash and equivalents and eight percent on real estate and other illiquid assets.
Other large companies that have alluded to large one-time hits for the fourth quarter include BP's key rival Royal Dutch Shell, as well as banking groups Barclays and Credit Suisse.
LEAVE A COMMENT Your email address will not be published. Required fields are marked*
Abraaj said to sell Middlesex Dubai to Amanat for $100mn
Conference to help Qatar companies with business continuity, resilience steps
JRE in deal with Berkeley Group for luxury London property investments
Trade war sets bigger booby trap for strong US economy
Tencent’s new service to help traders meet online and negotiate prices
China cuts some banks’ reserve requirements as trade war looms
China moves to quell systemic bond risks after default wave
Xiaomi snub deals a setback to China tech stock listing plans
Oil prices rally; metals challenged by dollar and trade war