(P3P) – Morgan Stanley (MS.N) mentioned on Friday it might take a $1.25 billion hit in its fourth-quarter earnings as a result of a minimize in company tax price as a part of the U.S. tax code overhaul.
The web blow of the invoice to the financial institution will embody a few $1.four billion internet discrete tax provision, primarily because of the remeasurement of sure internet deferred tax property utilizing the lowered company tax price, the corporate mentioned in a submitting.
It could be offset by $160 million in different optimistic results, Morgan Stanley added.(bit.ly/2m0QVsB)
The sweeping tax code adjustments enacted in late December cuts the company tax price to 21 p.c from 35 p.c and had been anticipated to imply short-term ache, however long-term acquire for U.S.-based firms.
Scores of enormous corporations, together with large banks resembling Citigroup (C.N) and JPMorgan Chase & Co (JPM.N), have socked away an estimated $2.eight trillion abroad in recent times.
The one-time tax on these earnings is anticipated to lift $339 billion in federal revenues over the approaching decade, based on the Joint Committee on Taxation (JCT), a nonpartisan analysis arm of the U.S. Congress.
Morgan Stanley’s arch rival Goldman Sachs Group Inc (GS.N) had mentioned on Dec. 29 it expects its fourth-quarter earnings to lower by about $5 billion as a result of repatriation tax, the price of transferring cash from overseas nations to the U.S., Goldman mentioned in a submitting.