Company News

The one-time charge is due to U.S. corporate tax changes

By Canadian Press |
Source: The Canadian Press

Toronto-based Sun Life Financial Inc. says it will take a $200-million charge related to U.S. tax reform when it reports its fourth-quarter (Q4) results.

The company says the one-time hit is due to the impact of the tax changes on actuarial liabilities, deferred tax assets and liabilities and a one-time tax charge on deemed repatriation of foreign earnings.

Late last year, the U.S. cut its corporate income tax rate to 21%, from 35%, as part of an overhaul of its tax laws.

The move is expected to lift future earnings, but it also reduced the value of deferred tax assets held on company balance sheets, prompting firms to recognize one-time charges related to the change.

Sun Life estimates that it expects the lower tax rate in the U.S. will mean that the tax expense included in its 2018 underlying net income will fall by approximately $130 million.

The company is expected to report its Q4 results on Feb. 14.