Thursday 17 January 2019

Revenue hits pharmaceutical company with €1.6bn tax bill, second largest in Irish history

Revenue Commissioners
Revenue Commissioners
Ellie Donnelly

Ellie Donnelly

The Revenue has issued a €1.6bn tax demand against pharma giant Perrigo.

This is the second largest tax assessment in Ireland after the Apple case.

In a statement Perrigo said it "strongly disagrees" with the assessment and believes that the Notice of Amended Assessment is "without merit".

The company asserts that Irish Revenue’s position is incorrect as a matter of law, based upon applicable case law, as well as both Irish Revenue published guidance and their related published precedents.

It added that, no payment of any amount related to this assessment is required to be made, if at all, until all applicable proceedings have been completed, which could take a number of years.

Perrigo said it would appeal the decision and intends to contest the tax assessment "vigorously through all available administrative and judicial avenues."

The tax decision is based on the claim that intellectual property sales transactions by Elan Pharma (acquired by Perrigo in 2013), including the sale of Tysabri to Biogen Idec, were not part of the trade of Elan Pharma and therefore should have been treated as chargeable gains.

Chargeable gains are subject to an effective 33pc tax rate, rather than the 12.5pc tax rate applicable to trading income.

Perrigo believes that the matter will not result in a material impact on its consolidated financial position, results of operations or cash flows as of December 31, 2018.

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