Philadelphia Inquirer, The - Glaxo will pay billions to IRS
In the biggest tax settlement in U.S. history, the drug giant GlaxoSmithKline P.L.C. has agreed to pay $3.4 billion to the federal government in a case with tax implications for other multinational corporations. GlaxoSmithKline, based in London with a U.S. headquarters in Philadelphia, said it was settling to avoid a far bigger potential hit from allegations that it undervalued its U.S.
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profit on nine products - including the heartburn medicine Zantac and the asthma drug Advair - between 1989 and 2005. The large settlement was seen as a victory for the IRS in its long battle against “transfer pricing,” in which multinational firms ascribe revenue from intangible products like patents and development rights to subsidiaries in low-tax countries, and allocate expenses to high-tax countries, as a way of minimizing taxes. “The IRS won. Everybody knows this is going on” among global companies, said Jennifer Blouin, an accounting professor at the …
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