A judicial review into a €1.64bn tax assessment handed to Perrigo, a US pharmaceutical company headquartered in Ireland, is to move ahead at the beginning of June having been delayed due to Covid-19.
Last week, Murray Kessler, chief executive of Perrigo, which is listed on the New York Stock Exchange with a $7.4bn (€6.78bn) market capitalisation, said the judicial review of Revenue's tax assessment would take place on June 3. The case had been delayed due to Covid-19, with Kessler stating he thought it may have been pushed out until the end of the year.
Kessler said he was looking forward to Perrigo's day in court and was confident of its position on the case.
"And if it goes the other way, we're nowhere soft," he said. "But we think we have a darn good argument."
Kessler said Perrigo would be prepared to take the case to an appeal should it fail. He said if Perrigo "were to go through the entire system, so if we were to lose and actually pay cash, I believe that's a five to 10-year process". He added that once things get going, there could be an opportunity for a "discussion to make it go away".
According to Randall Stanicky, an analyst at RBC Capital Markets, should Perrigo succeed, the tax liability would be gone "for the most part".
Perrigo's judicial review is challenging Revenue's tax assessment as the company feels it had "legitimate expectations" based on prior tax returns to Revenue.
Revenue's €1.64bn tax claim is related to Perrigo's 2013 acquisition of the Irish company Elan, and the development of Tysabri, a treatment for multiple sclerosis.
The claim relates to Elan's sale of a 50pc stake in Tysabri to Biogen, a separate US pharmaceutical company. The Biogen Tysabri deal happened eight months prior to Perrigo's acquisition of Elan.
Through the deal, Elan received $3.25bn and a significant ongoing royalty stream. The upfront proceeds of the sale were reported as trading income, which was charged at the corporation tax rate of 12.5pc.
In December 2018, Revenue hit Perrigo with the €1.64bn tax case. The agency said the cash should have been declared as capital gains, which are taxable at 33pc. The judicial review of the tax claim was supposed to begin in April. It was delayed due to Covid-19 restrictions. Perrigo had wanted the hearing to proceed by imposing strict conditions on the number of people attending the trial and subjecting the courtroom to deep cleaning at the end of each session.
Sunday Indo Business