Credit Suisse expects a higher tax rate for 2018 than previously forecast, saying on Wednesday it expects to be hit by U.S. tax provisions aimed at preventing companies from shifting profits abroad.
Switzerland's second biggest lender said it expects an effective tax rate of roughly 40 percent on 2018 results, up from the 36.8 percent rate for the first nine months and higher than its previous full-year guidance of 37 percent.
The bank said the estimate included an "adverse impact" of about 2 percent, based on its assessment of new U.S. regulations.
The Base Erosion Anti-Abuse Tax (BEAT), introduced by the U.S. Treasury Department in December, aims to prevent companies from reducing earnings of their U.S. operations by loading their businesses with costs and deductions, and then using intercompany transfers to shift profit to lower-tax locations abroad.
The rule applies to corporate taxpayers with gross receipts of more than $500 million that make deductible payments to foreign entities. While the BEAT rules are still subject to final clarification, Credit Suisse said "it is more likely than not that the group will be subject to this tax for 2018".
The bank also estimates the BEAT regulations would raise its tax burden by about 2 percent next year, to an estimated 30 percent. The Zurich-based lender, due to report full year figures on Feb. 14, said it still awaited final publication of the rules before it could say for certain if it was liable for the tax in 2018 and 2019, as well as the size of the liability.