Compass Expects US Tax Rate to Fall to Near 24% From 26.5%

   By Oliver Griffin 
 

Catering company Compass Group PLC (CPG.LN) said on Monday that it expects its effective tax rate to fall to 24% from 26.5% due to the new U.S. tax law.

The decrease in tax will take effect in the year ending Sept. 30, 2018, with the group's cash tax rate expected to be between 19% and 22%, the company said.

Compass said the new law will also require the company to revalue the net deferred tax asset recognized on its U.S. balance sheet before the year end, but said it did not expect this to have a material affect.

The new tax law was approved by President Donald Trump in December. The change in legislation brings benefits for U.S. companies, including a drop in headline corporate tax rates. Foreign companies could be in line to benefit, but the reworked U.S. tax code could negatively affect non-American firms.

Certain aspects of the new law may be subject to clarification and could change the extent to which Compass is affected by the new tax legislation, the company said.

Compass said 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.

Write to Oliver Griffin at [e-mail]

(END) Dow Jones Newswires

January 22, 2018 02:45 ET (07:45 GMT)

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