Tag: Perrigo

Perrigo has settled its €1.6 billion tax bill with the Irish Revenue for €297 million

Perrigo has settled its €1.6 billion tax bill with the Irish Revenue for €297 million

Pharmaceutical group Perrigo has settled a €1.6 billion case with the Irish Revenue Commissioners for €297 million. Perrigo was issued a tax assessment in 2018. The assessment related to Perrigo’s tax treatment of income generated by the sale of the rights to Tysabri – a drug for the treatement of multiple sclerosis. The tax authorities held that proceeds form the sale of these rights – more than $ billion – was a capital transaction taxed at a rate of 33%, while Perrigo had treated the proceeds as trading income taxed at the standard rate of 12.5%. In November 2020 Perrigo lost the case at the Irish High Court. Following the settlement Perrigo issued an announcement “While the Company believes that its tax position was correct and would ultimately have been confirmed by the Tax Appeals Commission, given the risks inherent in any litigation, as well as the ongoing costs of what could have been years of litigation and the uncertainty ... Read more
Ireland vs Perrigo, November 2020, High Court, Case No[2020] IEHC 552 (Juridical Review)

Ireland vs Perrigo, November 2020, High Court, Case No[2020] IEHC 552 (Juridical Review)

Perrigo has lost is request for overturning a €1.64 billion tax assessment in a judicial review by the Irish High Court. The contention of the Irish Revenue is that a transaction (involving the disposal of intellectual property rights) which has been treated as part of the trade of Perrigo in its corporation tax returns should properly have been treated as a capital transaction. When treated as a capital transaction an effective tax rate of 33% is applied rather than the usual 12.5% rate. The Irish Revenue’s qualification of the transfer in question as an capital transaction results in additional taxes in the amount of €1,636,047,645. The transaction involved the sale to Biogen, in 2013, of Perrigo’s remaining 50% interest in the intellectual property relating to a pharmaceutical product sold under the brand name Tysabri which is used to treat multiple sclerosis and Crohn’s disease. “Perrigo explains that from 1st January, 2000, EPIL [Elan Pharma International Ltd] began to fund the continued ... Read more
Perrigo facing billion dollar tax assessments in both Ireland and the US

Perrigo facing billion dollar tax assessments in both Ireland and the US

In July 2013 the Irish pharma company Elan was acquired by the US based Perrigo group for $8.6 billion (£5.6 billion). Ireland’s corporation tax rate was one of the main attractions for Perrigo and the deal was said to give Perrigo substantial tax savings due to a corporate tax inversion. The Irish 12.5 % corporate tax rate compared US rate of 30 % was further augmented by the trading losses built up over a number of years by Elan in its business as a drug development group. That meant that even with a $3.25 billion transaction like Elan’s sale of the rights to the multiple sclerosis drug Tysabri the company would still not have to pay any tax. The low-tax scenario envisioned by Perrigo did not last for long. First Perrigo was issued a $1.9 billion tax bill (excluding interest and penalties) by the Irish tax authorities for incorrect transfer pricing related to its sale of a 50% interest in Tysabri ... Read more