Shire informed no Irish tax on billion-dollar sum
Tax advisers to Shire have told the Irish-headquartered pharmaceuticals company that a $1.65bn break fee it got after a merger with Chicago-based AbbVie fell through is not taxable here.
"The company has therefore concluded that no tax liability should arise and has not recognised a tax charge in the income statement in the current accounting period," Shire said.
However, Shire said it hasn't agreed the position with Revenue. Revenue said it does not comment on individual cases.
"I expect that Revenue's large cases division will examine in detail all of the relevant facts and circumstances of this specific case and without being privy to those facts it is not possible for me to draw detailed conclusions," BDO international tax partner Kevin Doyle told the Irish Independent.
"However, Irish tax law is broadly written in terms of its scope to tax revenue and capital receipts of Irish tax-resident companies. Companies are subject to corporation tax (effectively at the 33pc CGT rate) on most capital receipts.
"Certain capital receipts such as paid up share capital, capital contributions between connected parties and certain share disposals are exempt or otherwise not taxable," Mr Doyle said.
"However without the details of the case it is difficult to assess how a break fee, which presumably represents a contractual right to payment, may fall to be an exempt or otherwise tax free receipt."