Zurich — Switzerland’s biggest banks expect a planned US corporate tax cut will cost them billions of dollars because of writedowns on deferred tax assets, setting up Credit Suisse for its third consecutive annual loss. Credit Suisse estimates that the proposed sharp reduction in the US corporate tax rate, now moving through Congress, will cost it Sf2.1bn ($2.1bn). UBS expects Sf3bn in writedowns due to the cut. US legislators are discussing reducing the corporate tax rate to 20% from 35%. If they succeed, it will be the first major US tax overhaul in 31 years. A deferred tax asset built up during loss-making periods reduces the amount of tax subsequently due in future periods of profit. If the bill is signed into law before the end of the year, Switzerland’s big banks would have to book the losses in 2017 as well. The figures suggest Credit Suisse would make a loss for the full year as it reported Sf1.1bn in net income in the first nine months of 2017. UBS reported Sf3.3bn in nine-...
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