Shell, Barclays say U.S. tax overhaul will impact fourth quarter results

Dec. 27 (UPI) -- The impact from President Donald Trump's tax overhaul, which takes effect Jan. 1, is expected to hit some companies with a big charge for the fourth quarter of 2017.

Royal Dutch Shell said it expects the overhaul could translate to a U.S. tax charge of between $2 billion and $2.5 billion, stemming from a decrease in the value of deferred tax assets.

That estimate is based on how the tax reform would have impacted Shell in the third quarter, the company said.

The oil company said, though, it expects the change, which lowers the corporate tax rate from 35 percent to 21 percent, to be beneficial in the long term.

Companies can log deferred assets during unprofitable periods and later use them to offset tax payments -- but the assets are worth less on paper, now that the tax overhaul reduced the rate.

Trump signed the tax bill into law last week. The $1.5 trillion tax bill is the first major overhaul of the U.S. tax code in more than 30 years.

Barclays Bank is looking at similar changes related to the value of its deferred tax assets and liabilities -- and said it expects to take a noncash charge of $1.3 billion in Q4 of 2017, which could push the bank to a loss for the fiscal year.

Shell and Barclays said that despite big paper losses, they anticipate the cut in U.S. corporate taxes will be positive in the longer run.