BHP Billiton to take $1.8bn hit from new US tax law
Source - SMW
BHP said it expects to recognise an income tax expense of US$1.8bn following the lowering of US Federal corporate income tax rate from 35% to 21% as well as other measures introduced by the recently enacted US Tax Cuts and Jobs Act.
The company said that the tax expense will be treated as an exceptional item and would include two main components: a non-cash re-measurement of deferred taxes as a result of the reduction in the US Federal corporate income tax rate of US$898m and a non-cash impairment of foreign tax credits due to reduced forecast utilisation of US$834m.
Over the longer term, however, the company said that US tax reform will have a positive impact on US attributable profits mainly due to the lower corporate tax rate.