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

Last Updated: Fri, Dec 29, 2017 18:25 hrs
FILE PHOTO - Goldman Sachs sign is seen above floor of the New York Stock Exchange shortly after the opening bell in the Manhattan borough of New York

Goldman Sachs Group Inc 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.

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

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 to bring back its $252.3 billion 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 $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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