Royal Dutch Shell says Trump’s tax cuts will favour operations

Royal Dutch Shell plc said it expects the potential economic impact of the recently enacted US tax reform legislation to be favourable.

The company said the tax cuts will be favourable to Shell and to its US operations, primarily due to the future reduction in the US corporate income tax rate from 35% to 21%.

This change in US tax legislation (effective January 1, 2018) will impact Shell’s fourth quarter 2017 results but the analysis of the actual impact is not yet complete.

Shell intends to determine and announce the actual impact including any fourth quarter movements, and balance sheet adjustments, as part of its fourth quarter 2017 results.

However, on the basis of the third quarter 2017 financial statements, Shell would have incurred an estimated charge to earnings of $2.0to 2.5 billion primarily driven by a re-measurement of its deferred tax position to reflect the lower corporate income tax rate.

Shell disclosed that the charge represents a non-cash adjustment and will be reflected as an identified item.