Daimler says U.S. tax reform will lift 2017 net income

FRANKFURT (Reuters) – German carmaker Daimler said on Friday the U.S. tax reform would result in an income tax benefit of around 1.7 billion euros ($2.01 billion) in its 2017 results.

Other issues not connected to the U.S. tax reform will lead to higher taxes, however, which means the overall increase in net income will come to around 1 billion euros, the company said, without providing details of those other issues.

U.S. President Donald Trump signed off on a $1.5 trillion tax overhaul on Friday, which slashes the corporate rate from 35 percent to 21 percent.

“Due to the broadly based U.S. industrial and financial services business, combined with a material value added, Daimler – similar to many other local U.S. companies – benefits from the decided tax reform,” Daimler said.

The lower tax rate requires the revaluation of net deferred tax liabilities at Daimler’s U.S. subsidiaries, which the group said exceed its deferred tax assets.

It said it was still analysing the possible impact of other measures in the tax law.

The tax benefit will not affect its industrial free cash flow or operating profit for 2017, it said.

($1 = 0.8442 euros)

(Reporting by Maria Sheahan; Editing by Adrian Croft and Elaine Hardcastle)