Goldman Sachs said its fourth-quarter profit may be due to the U.S. new tax law

Goldman Sachs Group (GS.N) said on Friday that fourth-quarter profits may be reduced by $ 5 billion due to the new U.S. tax code. Goldman Sachs was the first U.S. bank to specifically disclose the one-time impact of the new tax law on the profits of overseas companies.

 
After Trump signed the legislation, the new U.S. tax code came into force on January 1. For companies such as Goldman Sachs registered in the United States but with a global presence, it will be painless in the short term, but long-term growth can be expected.

Like many such multinationals, Goldman Sachs billions of dollars in profits overseas, according to the law by the law, as long as the profits did not enter the United States will be exempt from 35% of the United States corporate tax.

 
The new tax law encourages companies to repatriate such profits and imposes a compulsory tax of 15.5% on cash and liquid assets. The tax rate on non-liquid assets is 8%, regardless of whether these profits are repatriated to the Mainland.

In recent years, several large corporations, including Citigroup (C.N.) and JPM.N, have estimated an estimated 2.8 trillion U.S. dollars in overseas investment. According to the JCT, the one-time tax levied on these moneys can raise federal revenues of $ 390 billion over the next 10 years.

That will hurt multinationals for some time, but they have eight years to pay taxes. Under the new law, some other tax benefits to banks will be canceled or curtailed, including restrictions on interest deductions and restrictions on premium deductions paid to the Federal Deposit Insurance Corporation (FDIC).

Some U.S. financial firms have disclosed the impact of deferred tax assets related to the losses during the financial crisis of 2007-2009.