Business Irish

Thursday 8 December 2016

Clinton joins US chorus of condemnation over Pfizer's Irish move

Kevin Drawbaugh and Emily Stephenson

Published 25/11/2015 | 02:30

US Democratic presidential candidate Hillary Clinton. Photo: Reuters
US Democratic presidential candidate Hillary Clinton. Photo: Reuters

US presidential hopefuls have lined up to slam drug giant Pfizer's planned move to become tax resident in Ireland.

  • Go To

Democrats heaped the most criticism on the New York-based drugmaker, with Hillary Clinton accusing Pfizer of using legal loopholes to avoid its "fair share" of taxes in a deal that she said "will leave US taxpayers holding the bag."

Pfizer will shift its global headquarters to Ireland, for tax purposes, following a deal to merge with smaller Dublin-based rival Allergan in a transaction that is expected to close next year.

US politicians have condemned the deal, which means Pfizer's global profits will potentially be liable for tax at Ireland's 12.5pc rate (see box) instead of the 35pc levied in the US.

The White House declined to comment on Pfizer's deal, but a spokesman for US President Barak Obama said Congress should take action to prevent more such transactions.

Ms Clinton, front-runner for the Democratic presidential nomination in the November 2016 election, said she will propose steps to prevent more inversions, but she did not provide details.

"We cannot delay in cracking down on inversions that erode our tax base," said the ex-US secretary of state and former New York senator in a statement. Republican front-runner Donald Trump, who has called for a corporate tax overhaul, called the deal "disgusting" in a statement, saying "our politicians should be ashamed".

Pfizer is doing the largest so called tax inversion deal of all time. In a $160bn transaction, it plans to move its tax address from the United States to Ireland, if only on paper, by buying and merging into Allergan, a smaller, Irish-based competitor. The combined company will be called Pfizer and will be run by Pfizer's chief executive, with executive management staying in New York and extensive operations across the United States, but it will no longer be taxed as a US company.

More than 50 similar deals have been done over three decades by well-known companies such as Medtronic, Fruit of the Loom and Ingersoll-Rand.

Congressional researchers have estimated inversions, left unchecked, will cost the US Treasury nearly $20bn in the next 10 years.

Irish Independent

Read More

Promoted articles

Editors Choice

Also in Business