Goldman Sachs says the item’s about to take a big hit through the massive overhaul to the U.S. tax code.
The investment bank forecast of which adjustments to American tax rules will knock $5 billion off its profit within the final quarter of 2017.
Goldman ( said the majority of the $5 billion hit will come through a “repatriation tax,” which will be a brand-new one-time tax on the cash the item hold overseas. )
Tax experts expect of which many additional big U.S. companies will announce similar one-off tax charges on their foreign cash stash within the coming weeks. Apple (, in particular, will be known for holding a huge amount of cash abroad. )
“They should all come out with similar statements,” said Ryan Dudley, the head of international tax services at Friedman LLP.
The brand-new rules outline of which U.S. companies will have to pay a tax of between 8% as well as 15.5% on all their foreign-held cash After of which one-time tax will be paid, companies will be able to bring foreign-held money back to the U.S. without paying tax.
Goldman declined to comment on whether the item would certainly be bringing back money through overseas after paying of which charge.
The banking giant said the item will also have to write down the value of tax credits the item had been saving up. Goldman plans to use the credits within the future to lower its tax bill, nevertheless they’ll be worth much less when the brand-new rules take effect next year.
President Trump signed the tax reform bill into law last week with the promise of which lower taxes would certainly boost business profits.
Longer term, a lower U.S. corporate tax rate — down to 21% through 35% — will be supposed to be positive for business.
Many big international companies have said the adjustments will benefit them over the long term, nevertheless warned of which the tax adjustments will mean billions of dollars in one-off losses.
Major European banks Barclays (, )Credit Suisse ( as well as )UBS (, plus oil giant )Shell (, have indicated the brand-new tax rules could cost them between $1 billion to $3 billion each in one-off charges. of which will be mainly related to rejiggering their accounting of tax credits. )
sy88pgw (London) First published December 29, 2017: 7:50 AM ET