Friday, 29 December 2017

Goldman expects $5 billion hit to quarterly earnings due to new tax law

Goldman Sachs Group Inc (GS.N) said on Friday it expects fourth-quarter earnings to decrease by about $5 billion due to the new U.S. tax law signed by President Donald Trump last week.


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

Congress last week approved a U.S. 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 U.S. companies - to 21 percent from 35 percent - allowing them to repatriate cash from overseas, and modifies numerous deductions, among other changes.

The tax overhaul will allow Apple Inc (AAPL.O) to bring back its $252.3 billion foreign cash pile without a major tax hit - a long-standing company goal.

Drugmaker Amgen Inc (AMGN.O) last Friday also said it expects to incur tax expenses of $6 billion to $6.5 billion over time as it repatriates cash it has accumulated around the world because of the new law.

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