Oil giant BP said it plans to offset the entire cost of its Gulf of Mexico oil spill against its tax bill, reducing future contributions to U.S. tax coffers by almost $10 billion.
BP took a pretax provision of $32.2 billion in its accounts for the period, for the cost of capping the well, cleaning up the spill, compensating victims and paying government fines.
However, the net impact on BP's bottom line will only be $22 billion, with the company recording a $10 billion tax credit, most of which will be borne by the U.S. taxpayer, a spokesman said.
BP's U.K. tax bill will also be reduced, BP added.
Analysts told Reuters that BP could prompt more public and political anger in the United States by deducting all the costs, and especially the expected fines BP will face.
In 2006, Boeing Co decided to forego seeking a tax deduction for any of a $615 million settlement with the government over ethics charges, under pressure from lawmakers.
BP spokesman Toby Odone told msnbc.com: "This is just normal practice. If you declare an income, you have to pay tax on it — it's the way tax laws are set up. We will pay less in tax because we are earning less, as you would as an individual if you were earning less.
"This is the accounting process," he added. "We are going by U.S. laws, we're following the accounting laws of the country. We are a business and we have shareholders we are responsible to."
He said the Boeing decision was different, adding that BP would not be allowed to offset taxes against any fines or settlements with the government over the spill.
Oil analyst Dougie Youngson, of London-based Arbuthnot Securities, also told msnbc.com that BP's decision to offset the spill costs was normal procedure.
Asked about those who might feel BP has a moral duty to bear the costs of the spill without offsetting the losses, Youngson said: "If they want to change the rules of accountancy for one instance ... it's just a fact they are going to have to cope with.
"If you make a loss, you don't pay tax," he said. "I don't think morals come into it. I cannot remember any accountant being moral."