The American division of catering and services firm Compass Group plc has announced that it expects a lowering of its taxes thanks to reforms introduced by US President Donald Trump in December.
The group has predicted that its effective tax rate will reduce to 24% from 26.5% while its cash tax rate is projected to be between 19% and 22% in the year to the end of September 2018.
The company said the new law means it will need to revalue the net deferred tax asset recognised on its US balance sheet before 30 September 2018 but “does not expect this to be material”.
The controversial bill, which includes permanent tax breaks for corporations, passed through the Senate and House of Representatives last month.
“We note that certain aspects of the new law may still be subject to future clarification and as such could affect the extent to which we are impacted by the reduction in the headline tax rate,” Compass said.
“In addition, there is still uncertainty around the interaction between the new federal tax legislation and tax legislation at the state level which could also have an impact.”
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Compass’s North American operations brought in 13.3 billion in sales for in 2017, 58% of the group’s overall, global revenues for the year (£22.9bn).
On the last day of 2017, the group lost its chief executive Richard Cousins, who died along with several family members when the plane they were flying in crashed near Sydney, Australia.
Dominic Blakemore was made the firm’s new chief in January, after a decision was made to bring forward his promotion that had been originally scheduled for March.