BHP will record a $US1.8 billion ($2.3 billion) tax expense in its upcoming half-year report due to changes to the US corporate income tax rate.
The US Tax Cuts and Jobs Act has introduced a reduction in the US Federal corporate income tax rate from 35 per cent to 21 per cent, as well as other measures, including changes to international tax provisions.
US President Donald Trump supported the changes, which were passed by Senate last December.
The miner said it would treat the expense as an exceptional item, adding that its two main components were expected to be: “A non-cash re-measurement of deferred taxes as a result of the reduction in the US Federal corporate income tax rate of $US898 million; and a non-cash impairment of foreign tax credits due to reduced forecast utilisation of $US834 million.”
BHP, which is scheduled to release its first-half results next week, was optimistic about the impact of the tax reform over the long term.
“The US tax reform will have a positive impact on the group’s US attributable profits in the longer term mainly due to the lower corporate tax rate,” the company said.