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AstraZeneca settles HMRC transfer pricing dispute
Anglo-Swedish drugs company AstraZeneca is pay £505 million to the UK government to settle a long-running dispute over taxes, which may interest those involved in corporation tax planning.
The payment will bring to an end a transfer pricing issue with HM Revenue & Customs (HMRC) which has been running since 1996, the company said in a statement to shareholders.
AstraZeneca will pay a first instalment of £350 million in March this year, with a second payment of £155 million scheduled for March 2011.
As a result of the resolution, AstraZeneca will pay around two per cent lower group tax this year than it had previously expected to.
It is the latest in a series of deals around the world relating to transfer pricing, which allows companies to reduce their corporation tax liabilities by transferring intangible properties to subsidiaries.
In 2006, GlaxoSmithKline settled a transfer pricing dispute with the US Inland Revenue Service for $3.4 billion (£2.2 billion).
Posted by Susie Cho.
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