Smith & Nephew PLC (LON:SN.) saw its shares rise today after the global medical technology business announced updated guidance regarding its expected US corporate tax rate following recent legislative changes.
In a statement, the FTSE 100 listed group it now expects a corporate tax rate on its 2018 trading results in the range 20% to 21% for the medium term, barring any changes to tax legislation or other one-off items.
READ: Smith & Nephew says full year growth to be at lower end of guidance range
The orthopaedic products firm said this is a reduction of 4 to 5 percentage points on its previous guidance of around 25%.
S&N said the one-time effects of US tax reform in 2017, including the revaluation of certain deferred tax balances, are not expected to be material and will be taken outside trading results.
Separately, the group added, it now expects the full year tax rate on 2017 trading results to be lower than its previous guidance of around 22%.
The company said this is mainly due to the release of provisions, which are one-off in nature, as it concludes and revises open tax issues, including the US tax audit as reported at the half year.
It said the final tax rate will be disclosed with S&N’s results for the year ended 31 December 2017 due to be published on 8 February 2018.
In late afternoon trading, S&N shares were 1.9% higher at 1,259p.