InterContinental Hotels Group PLC (LON:IHG) said US President Donald Trump’s sweeping tax reform will result in a “significant” one-off credit in the financial year the bill is signed into law.
The US House of Representatives gave the final approval to the US tax bill on Wednesday, resulting in the corporate tax rate falling to 21% from 35%.
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The House passed the bill for a second time in two days after making a mistake in its passage on Tuesday. The bill will now be sent to Trump to be signed into law.
IHG, which owns the Holiday Inn and Crowne Plaza brands, said it expects the bill will reduce its effective tax rate by mid-to-high single digit percentage points from January 1.
In 2017, IHG's effective tax rate is still expected to be in the low 30s.
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“It is also expected that the measures outlined in the bill will result in a significant, exceptional tax credit in the financial year the bill is signed into law, which would be realised in cash terms over a long period from 2018,” the company said.
White House economic adviser Gary Cohn said Trump could sign the bill as soon as Friday if automatic spending cuts triggered by the legislation are waived in a spending resolution that Congress is expected to pass.
“If not, most likely we’ll sign it in the first week of the new year,” Cohn told Fox News.