Elan boss hits out at 'hypocrisy' in row over tech giants' tax affairs
The chairman of Irish drug company Elan, Bob Ingram, has waded into the debate over the ongoing US probe of the tax affairs of Ireland-based subsidiaries of tech giants including Apple.
He said US politicians had been acting as demagogues.
"As an American, I think it is shameful," he said, adding that companies such as Apple had been hounded "for obeying the tax law".
"If they want to fix this hole, fix the tax code. It's hypocrisy at its worst," said Mr Ingram, a former senior executive with GlaxoSmithKline.
"Elan is a long-term Irish company. Our tax rate is a real tax rate. It's not a shell operation – we have a real company," he added.
Elan has availed of $4.5bn (€3.5bn) in accumulated net operating losses generated in Ireland and which it had on its books so as to avoid paying any tax on the recent $3.25bn (€2.5bn) sale of its 50pc stake in multiple sclerosis drug Tysabri.
Elan chief executive Kelly Martin said the company retained about $1.5bn in accumulated net operating losses on its books, which the company can offset against any tax liability on future income or profits from asset sales.
The company will continue to receive substantial annual revenue from royalty payments on Tysabri sales. Based on assumed worldwide sales of the drug, Elan reckons that it could be receiving anywhere between $484m and $611m a year in royalties from the treatment, which is now wholly owned by US-based Biogen Idec.
Elan believes it will pay an effective cash tax rate of just 1pc on those royalties.
Mr Ingram's comments come as US politicians continue to pile pressure on domestic firms using tax agreements to legitimately cut their tax liabilities.
Apple has denied it had a special tax deal with Irish authorities.
Ireland's Ambassador to the US, Michael Collins, last week wrote to two powerful American senators – Carl Levin and John McCain – saying they were wrong to label Ireland a tax haven.