Goldman expects RM20bil hit to quarterly earnings due to new tax law

  • Banking
  • Friday, 29 Dec 2017

FILE PHOTO: A sign is displayed in the reception of the Sydney offices of Goldman Sachs in Australia, May 18, 2016. REUTERS/David Gray/File Photo

BENGALURU: Goldman Sachs Group Inc said on Friday it expects fourth-quarter earnings to decrease by about US$5bil (RM20.3bil) due to the new US tax law signed by President Donald Trump last week.

Around two-thirds of the US$5bil decrease is due to repatriation tax, Goldman said in a statement with the US Securities and Exchange Commission.

However, the impact of the tax legislation may differ from the estimate, according to the bank.

Congress last week approved a US tax overhaul, the biggest in 30 years, which includes steep tax cuts for corporations and wealthy taxpayers.

The new law significantly lowers the income tax rate for US companies - to 21% from 35% - allowing them to repatriate cash from overseas, and modifies numerous deductions, among other changes.

The tax overhaul will allow Apple Inc to bring back its US$252.3bil (RM1.02 trillion) foreign cash pile without a major tax hit - a long-standing company goal.

Drugmaker Amgen Inc last Friday also said it expects to incur tax expenses of US$6bil to US$6.5bil over time as it repatriates cash it has accumulated around the world because of the new law. - Reuters
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