AstraZeneca to pay HMRC £505m transfer pricing bill
Pharmaceutical giant throws in the towel after long running dispute with the taxman and agrees to pay tax bill
AstraZeneca has announced it will shell out £505m to the taxman to settle a
transfer pricing dispute spanning 15 years.
Under the agreement, AstraZeneca will pay the sum to resolve claims made by
the taxman for transactions made between 1996 and the end of 2010.
The movement of company assets or services from one part of a multinational
to another has long been a bone of contention for the taxman.
This is because of concerns the transactions are not carried out at arms
length, keeping tax revenues out of the UK’s coffers.
“As a result of this agreement, the joint referral of this issue to the UK
Tax Court by AstraZeneca and HMRC, as disclosed in the 2008 Annual Report, will
be withdrawn,” the FTSE 100 company added.
AstraZeneca had provided in its accounts for the outcome of this issue, “at
the heart of which are complex transfer price considerations that have taken
many years to resolve.”
The payment will be made by a first instalment of £350m in March 2010, and a
second final instalment of £155m in March 2011, AstraZeneca said.
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