Trump Tax Plan - Impact on the Energy Sector

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Republican tax plan offers mixed bag for energy. Argus Media.

Energy companies will find things to like in a tax plan backed by President Donald Trump that would cut corporate rates to 20pc, although some prized deductions could be lost. The plan would cut corporate rates from an existing top rate of 35pc, eliminate taxes on foreign profits and allow companies to immediately write off the cost of capital investments for at least five years. Those policies could mean lower taxes for US-based oil companies with operations around the world. And the oil industry is cheering the plan for immediate expensing of capital, which they say will free up cash to reinvest into new projects. But Republicans are also proposing to eliminate tax policies the energy sector has staunchly defended in the past, and the plan to enact tax changes within three months leaves the industry with little time to analyze potential impacts. "The inclusion or elimination of specific tax provisions, yet to be outlined, will be crucial to evaluating this tax reform plan," oil industry group the Independent Petroleum Association of America's president Barry Russell said.