BP PLC (LON:BP.) expects a positive uplift to future post-tax earnings from the US after lawmakers approved President Donald Trump’s sweeping tax reforms.
The oil giant said the lowering of the US corporate tax rate to 21% from 35% requires revaluation of its deferred tax assets and liabilities from the country.
It estimates a one-off non-cash charge of about US$1.5bn in this year’s fourth quarter results, to be published on February 6.
“The ultimate impact of the change in the US corporate income tax rate is subject to a number of complex provisions in the legislation which BP is reviewing,” the firm said in a statement.
Shares were little changed at 520p each in morning trading.
Mike van Dulken, head of research at Accendo Markets, said the company has "merely taken the lead from a long list of corporates saying reforms will be long-term positive for future earnings".
On BP's one-off non-cash charge in the fourth quarter, van Dulken said: "Whilst there is always the chance that the necessary hit turns out to be more, you would imagine the company has been conservative, meaning more likelihood that it in fact turns out to be less."