US Tax Cuts Provides 1B Euro Boost to Daimler Shareholders

Company increasing dividend to global shareholders.

by on Dec.26, 2017

Daimler AG will benefit from the new tax cuts in the U.S. to the tune of $1 billion.

Daimler AG expects the reduction in U.S. federal taxes to boost the company’s net income by roughly 1 billion euros, which will lead to higher dividends next year for automaker’s shareholders around the world, the company said in a statement released during the Christmas holidays.

The new tax law pushed by President Donald Trump includes the permanent reduction of the U.S. corporate income tax rate from 35% to 21%, starting Jan. 1, 2018.

Global Auto News!

“Due to the broadly based U.S. industrial and financial services business, combined with a material value added, Daimler — similar to many other local U.S. companies — benefits from the decided tax reform,” according to a statement by Daimler, which builds, cars, heavy-duty trucks and large diesel engines at operations spread across the United States with major employment clusters in Portland, Oregon, Detroit and Tuscaloosa, Alabama.

The reduction of the federal corporate income tax rate from 35% to 21% requires the revaluation of the net deferred tax liabilities and results in an income tax benefit increasing the Net Income of the Group for the year 2017 by approximately €1.7 billion.

(First Look: 2018 Mercedes-Benz G Wagen. Click Here for the story.)

Last year, Daimler’s Supervisory Board approved a dividend 3.25 euros per share. The total dividend distribution amounts to 3.477 billion euros. the same as the prior year.

However, a significant part of the extra income Daimler realizes from m tax cut in the U.S is likely to wind up in the hands of Daimler’s shareholders in Europe and Asia. Daimler’s current dividend policy calls for distributing 40% of the company’s net income to shareholders and only 25.8% of Daimler’s shareholders are in the United States, according to the company’s Investor Relations website.

Some 6.8% of Daimler’s share belong to the Government of oil-rich Kuwait but the majority of the shares are hold by Europeans. Overall, 34.7% of Daimler’s shares are owned by German citizens, who pay a 25% withholding tax on their dividends to the German federal government in Berlin.

(Click Here for glimpse of the new Mercedes-Benz CLS.)

In September, Mercedes-Benz announced it planned to invest $1 billion to build electric cars at its big assembly plant outside Tuscaloosa. The investment is part of the company’s strategic plans to produce an electric vehicle, an EQ-branded SUV in Tuscaloosa.

Mercedes-Benz said the new investment will include construction of a battery plant and the addition of some 600 new jobs by the time the plant opens in 2019.

“With this $1 billion investment, we are significantly growing our manufacturing footprint here in Alabama, while sending a clear message to our customers across the U.S. and around the world: Mercedes-Benz will continue to be on the cutting-edge of electric vehicle development and production,” said Markus Schaefer, member of the Divisional Board of Mercedes-Benz Cars, Production and Supply Chain, who was on hand for the announcement in Alabama.

(Mercedes teams up with BMW, Ford, VW for pan-European EV charging network. Click Here for the story.)

Mercedes-Benz also is planning to have production locations for EVs and batteries in Europe, China and the U.S.

Tags: , , , , , , , , ,

Comments are closed.

велосипед киев купить