(Bloomberg) -- Credit Suisse Group AG, Switzerland's second-largest bank, said its earnings last year will probably be subject to higher taxes than the bank had assumed because of changes in the U.S.
The Swiss bank expects an effective tax rate of about 40 percent for 2018 because of the impact of the new BEAT, or base erosion and anti-abuse tax. That compares with 36.8 percent for the first nine months of the year. The expected rate for 2019 will increase as well, to about 30 percent, Credit Suisse said in a statement on Wednesday.
“While the BEAT rules are still subject to final clarification, Credit Suisse now believes that it is more likely than not that the group will be subject to this tax for 2018,” it said.
The new tax is intended to prevent big U.S. companies and non-U.S. corporations from shifting profits abroad. Seen as particularly onerous for banks because they face a higher rate than other multinationals, the provision was included in President Donald Trump's overhaul. The Internal Revenue Service has proposed giving foreign-based banks with U.S. operations some leeway when calculating it.
Read more: Foreign Banks Get a Break From IRS in Trump Tax Law's New Levy
HSBC Holdings Plc, Mizuho Financial Group Inc. and Deutsche Bank AG have disclosed they're likely to be affected by the new levy.
To contact the reporters on this story: Jan-Henrik Förster in Zurich at jforster20@bloomberg.net;Patrick Winters in Zurich at pwinters3@bloomberg.net
To contact the editors responsible for this story: Dale Crofts at dcrofts@bloomberg.net, Christian Baumgaertel
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