Amgen estimates its U.S. tax bill at over $6 billion as it repatriates cash
NEW YORK – Amgen Inc <AMGN.O> said it expects to incur tax expenses of $6 billion to $6.5 billion over time as it repatriates cash it has accumulated around the world because of the new U.S. tax law signed by President Donald Trump on Friday.
Some of the expense is also due to the revaluation of its tax liabilities, the drugmaker said in a filing with the Securities and Exchange Commission.
Amgen did not say how much of its $38.9 billion in cash and other holdings it plans to move back to the United States. To encourage U.S. companies to bring home the more than $2.6 trillion now held overseas, the law sets a one-time tax repatriation rate of 15.5 percent for cash and cash-equivalents and 8 percent for illiquid assets.
Amgen said its future U.S. income generally will be taxed at the 21 percent U.S. corporate income tax rate, while its income elsewhere will generally be taxed in the United States at 10.5 percent, reduced by foreign tax credits.
It said the tax expenses from moving its cash back to the United States will affect its current generally accepted accounting principles (GAAP) earnings forecast, but will not affect its non-GAAP forecast.
The company reportedly mounted a major lobbying campaign while tax reform was being hammered out in Congress. Most of its tax benefits in 2016 were related to income associated with its operations in Puerto Rico, which is considered a foreign jurisdiction for tax purposes.
The commonwealth government says Amgen is the island’s second-largest source of revenue, along with other pharma companies, which combined provide nearly a third of the local treasury’s income.
(Reporting by Michael Erman; Editing by Lisa Shumaker)