Abbvie in legal move on €572m tax bill

US pharmaceutical giant Abbvie has sought a judicial review against the Revenue Commissioners in what’s believed to be a dispute over a more than €570m tax bill related to the company’s $63bn (€52bn) acquisition of Botox maker Allergan that was completed last year.

Abbvie was hit with what was an unexpected €572m tax bill related to the takeover after the Government introduced a measure in the 2020 budget that ensured so-called share cancellation schemes, which are schemes of arrangement, would be liable for a 1pc stamp duty. Previously, they had been exempt.

The new measures were implemented immediately in 2019, snaring Abbvie as it progressed its takeover of Allergan.

Abbvie’s lawyers, Matheson, lobbied the G overnment expressing concerns about the move. It told the G overnment that the Budget change should have involved a transition period.

The share cancellation scheme saw Allergan cancel its shares and issue new shares to Abbvie.

High Court filings this week show that Abbvie has commenced judicial review proceedings against the Revenue Commissioners. Matheson is representing Abbvie.

An affidavit has been filed in the case by George Brady, a partner at Matheson who’s billed as one of Ireland’s leading corporate finance and mergers and acquisitions lawyers.

Completed last May, the takeover of Allergan was billed by Abbvie as being transformational and significantly expanding and diversifying Abbvie’s revenue base.

The company said the takeover complements its existing leading positions in immunology and haematologic oncology.

Abbvie releases its full-year 2020 results on February 3.

In October, Abbvie raised its full-year earnings forecast as it said there was signs of demand recovery for Botox as Covid restrictions eased, while its latest drugs also saw strong sales.

It expects sales of $2.2bn from psoriasis drug Skyrizi and rheumatoid arthritis drug Rinvoq for 2020, compared to a previous forecast of $1.7bn.

It launched them in 2019 as the US patent of its older blockbuster drug Humira, which treats the conditions, will expire in 2023.