GSK locked in $680m tax dispute with IRS
Pharmaceutical giant says US taxman has challenged inter-company financing arrangements
A tax battle has erupted between GlaxoSmithKline and the US Internal Revenue
Service over how certain inter-company financing arrangements at the
pharmaceutical business should be treated.
The IRS claim for tax an interest at the end of 2007 was sitting at $680m
(£348.9m). The claim from the US tax authorities relates to the period from 2001
to 2003.
GSK said it would ‘vigorously contest’ the IRS claim.
‘GSK believes, supported by external professional advice, that this claim has
no merit and that no adjustment is warranted,’ the company said in its final
results announced yesterday.
The company continues to be in dispute with HM Revenue & Customs too,
over transfer pricing and Controlled Foreign Companies tax issues ranging from
1994 until now.
The firm said HMRC had yet to formalise its claims. GSK said it hoped to
resolve the issues through discussion, but warned that there continued ‘to be a
wide difference between the Group and HMRC positions’ that may need to be
settled by litigation.
Further reading:
High risk tax schemes set to be
exposed
Pharmaceutical giant pays $2.3bn to settle US tax
dispute