World Economy

Goldman Expects $5 Billion Loss

Goldman Expects $5 Billion LossGoldman Expects $5 Billion Loss

Goldman Sachs expects to take a $5 billion hit to profits for the fourth quarter and year because of the US tax overhaul signed into law last week, CNBC reported. The New York bank said Friday that two thirds of the $5 billion are due to changes in repatriation taxes, when funds are returned from overseas. The remainder includes the “effects of the implementation of the territorial tax system and the remeasurement of US deferred tax assets at lower enacted corporate tax rates.” US companies had found ways to legally park money overseas to avoid the higher US corporate tax. It has been expected that changes in the law would prompt some of those companies to return money to the US, potentially $2.5 trillion or more. Economists believe the overall effect on the economy will be muted because of cuts to the US corporate tax rate. The tax change for Goldman Sachs was revealed in a filing with the US Securities and Exchange Commission early on Friday.

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