Hep C drug maker 'got Irish tax deal'
Published 08/08/2016 | 02:30
The US maker of a controversial $1,000-a-day hepatitis treatment may be benefiting from an Irish tax deal, a US lobby group has claimed.
Americans for Tax Fairness (ATF) has told US markets regulator the Securities and Exchange Commission (SEC) that a tax loophole has facilitated Gilead Sciences's three-fold increase in untaxed offshore profits, which rose from $8.6bn in 2013 to $28.5bn in 2015.
Gilead is best known for its Sovaldi treatment for hepatitis C, heralded as a medical breakthrough for patients but at a price that has caused uproar in the US and abroad.
The ATF has previously claimed Gilead's profit margin had soared and its tax rate plummeted since the drug maker introduced its controversial $1,000-a-day treatment for hepatitis C. "The profits are most likely in Ireland, a tax haven," ATF claimed in a submission to the SEC.
However, it provided no proof of its allegation that Gilead has benefited from any deal with the Irish government.
Gilead could not be reached for comment. The company employs more than 200 people here, and has a manufacturing plant in Cork.
The ATF submission came after the US markets regulator solicited views regarding the modernisation of certain business and financial disclosure requirements for public companies. It could be a precursor to US companies having to reveal more details about their overseas tax affairs.
ATF has claimed that moving some of its intellectual property to Ireland had allowed Gilead to cut its US tax bill by $10bn since 2013.
ATF told the SEC that if Gilead is benefiting from a deal in Ireland, it could face a big tax assessment in the event of a European Commission investigation, similar to the current probe into tax paid here by Apple.
The European Commission is currently probing whether or not Apple secured unfair tax arrangements in return for creating jobs in Ireland, a claim rejected by Apple and the Irish Government.
In a worst-case scenario, Apple could face a €17bn bill if the Government is forced to recoup taxes, according to a JPMorgan analyst.
Finance minister Michael Noonan has said the State here will fight any EU finding that tax wasn't properly charged here.
The US Senate Finance Committee investigated Sovaldi's pricing last year and was harshly critical of Gilead. The company's pricing decision was so focused on maximizing profits that "accessibility and affordability were pretty much an afterthought," Senator Ron Wyden, an Oregon Democrat, said in releasing the Senate committee's report.
Gilead now holds $28bn in earnings offshore and has paid 1pc in foreign taxes on its cash horde, according to company filings. (Additional reporting Bloomberg)