JOHANNESBURG (miningweekly.com) – The world’s largest diversified mining group BHP has flagged a $1.8-billion income tax expense as a result of the US Tax Cuts and Jobs Act, which will lower the country’s federal corporate income tax rate.
The tax expense will be treated as an exceptional item, and comprises a noncash measurement of deferred taxes of $898-million and a noncash impairment of foreign tax credits of $834-million, the Melbourne-headquartered company reported on Tuesday.
BHP said, however, that the US tax reform would have a positive impact on the group’s US attributable profits in the longer term, mainly owing to a reduction in the corporate tax rate from 35% to 21%.
The Tax Cuts and Jobs Act was signed into law in December last year and represents one of the most comprehensive reforms of the US federal tax code in a generation.
BHP owns petroleum assets in the US and operates two fields in the Gulf of Mexico, offshore from Louisiana. It also holds 838 000 acres in four US shale areas, which the group wants to sell.
The company, which is under pressure from activist group Elliot over its dual listing structure, will publish its interim results for the period ended December 2017, next Tuesday.