Trust Bloomberg Tax's Premier International Tax offering for the news and guidance to navigate the complex tax treaty networks and business regulations.
By Peter Hill
Publicly traded Australian multinationals with business in the U.S. have begun issuing formal statements to the Australian Stock Exchange on how the passage of tax reform in the U.S. impacts their U.S. tax positions.
The initial corporate statements—from Navitas Ltd., WorleyParsons Ltd and Brambles—for the most part take into account the immediate effect on the book value of tax assets after the U.S. reduced the corporate tax rate to 21 percent from 35 percent in the 2017 tax act (Pub. L. No. 115-97)
First to release statements to the Australian Stock Exchange (ASX) Dec. 27 were WorleyParsons, a provider of expertise in engineering, procurement and construction, and global education provider Navitas.
In its statement, Navitas said that in accordance with Australian accounting standards, it has re-measured the carrying value of its U.S. tax assets at the new corporate tax rate of 21 percent and reduced their carrying value from A$17.4 million ($13.7 million) to A$9.9 million.
“This change in value will result in a one-off charge to income tax expense of A$7.5 million that will be recorded in the 2018 interim financial statements of the Navitas Group,” the company said.
WorleyParsons said in its statement that while it is still considering the impact of the U.S. tax changes on its financial position as of Dec. 31, 2017 and on its effective tax rate going forward. Its current estimate is there will be a one-off charge to income tax expense of between A$45 million and A$60 million.
“This charge relates to a reduction in the Group’s US deferred tax assets due both to the decrease in the US corporate tax rate from 35% to 21% and to the potential loss in future years of currently available deductions,” the statement said. It also said that the charge would be excluded from the group’s underlying earnings.
Global supply-chain logistics company Brambles, notified the ASX Jan. 2 that it is also considering the impact of the law on its financial position as of Dec. 31, 2017and on its effective tax rate going forward.
But, Brambles’ said its current estimate is that there will be a one-off non-cash benefit to the group’s income tax expense of between $125 million and $155 million as of Dec. 31, 2017. As with Navitas and WorleyParsons, this benefit relates to a reduction in the group’s U.S. deferred tax liability due to the decrease in the corporate tax rate.
The company also stated that there are also a number of measures contained in the U.S tax changes “which could negatively impact” it, but that “subject to further review and analysis, Brambles’ preliminary assessment of the total tax reform package is that any change to the group’s effective tax rate is unlikely to be material.”
More information is expected from Brambles and WorleyParsons when they release their half-yearly results in February.
To contact the reporter on for this story: Peter Hill in Sydney at firstname.lastname@example.org
To contact the editor responsible for this story: Penny Sukhraj at email@example.com
The Navitas statement is available at https://e6c67dfea7107c66cf4b-5fe525cefecba56744297355853ea71e.ssl.cf6.rackcdn.com/1756269.pdf
The WorleyParsons statement is available at http://www.worleyparsons.com/InvestorRelations/ASX/Documents/2017/US%20tax%20law%2022%20Dec_FINAL.pdf
The Brambles statement is available at http://news.iguana2.com/brambles/ASX/BXB/1058220
Copyright © 2018 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)