BP expects changes to US tax rates to trigger a charge of about $1.5bn (£1.1bn) before benefiting the company in the long run.


The oil company said lower corporate taxes under President Donald Trump's plan require it to revalue deferred tax assets and liabilities. It expects the one-off cash charge of about $1.5bn to affect its fourth-quarter income statement.

BP joins Royal Dutch Shell and Barclays in predicting the US tax overhaul would cause large short-term charges followed by gains as federal corporate tax is cut to 21% from 35%. Shell expects a charge of up to $2.5bn in the fourth quarter and Barclays has prepared investors for a £1bn hit.

Last month the US Senate passed the most drastic changes to the country's tax code since the 1980s. The divisive package, proposed by Trump, includes a permanent tax cut for corporations. Trump has argued the measures will spur growth and create jobs but critics have said they will benefit companies and wealthy people over ordinary citizens.

BP said it would publish final details of the charge with its fourth-quarter results, due on 6 February and that it was examining the new rules to calculate the long-term effect of the changes.

"BP expects its future US after-tax earnings to be positively impacted by the recently-enacted changes to US corporate taxes, the company said. "The ultimate impact of the change in the US corporate income tax rate is subject to a number of complex provisions in the legislation which BP is reviewing."

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