AbbVie pre-empts Revenue’s tax appeal

PHARMA giant AbbVie has brought a “precautionary” High Court action against the Revenue arising from a €587m tax bill it got after acquiring Allergen.

The €587m was reduced to zero liability on appeal to a Tax Appeals Commissioner (TAC).

Revenue has appealed that decision to the High Court.

The court heard that last year AbbVie acquired pharmaceutical company Allegan, which was headquartered and registered in Dublin, for $63bn (€52bn) in return for cash and shares in AbbVie.

As part of that deal, shares in Allegan were cancelled as a result of its share capital being reduced.

Arising out of the takeover, AbbVie incurred a €587m tax bill from Revenue after the Government introduced a measure in the 2020 budget that meant share cancellation schemes, which are schemes of arrangement, would be liable for a 1pc stamp duty.

Previously, such schemes had been tax exempt. AbbVie contested that assessment and in a determination the TAC found in AbbVie’s favour – reducing the assessment to nil.

At the High Court yesterday, Michael Cush SC for AbbVie said that Revenue has sought to have that determination go before the court by way of a case stated.

Counsel said a central part of Revenue’s case was that the TAC lacked the jurisdiction to determine issues raised by Abbie as part of its appeal against the €587m tax bill.

Revenue also argued that AbbVie should have challenged the assessment in a High Court judicial review action, counsel said.

AbbVie’s view is that the TAC had the jurisdiction to hear and determine all matters of law and fact relating to tax assessments.

Mr Cush said that this application was “precautionary in nature,” and done in order to protect its position which was vindicated by the TAC.

It was being brought in the event the High Court finds that the TAC did not have jurisdiction to hear the appeal, and it should have been brought by way of judicial review.

In its judicial review proceedings AbbVie seeks various orders, including that the assessment made in July 2020 be quashed, and declarations against the Revenue Commissioners.

Mr Justice Charles Meenan granted AbbVie permission, on an ex-parte basis, to bring its challenge against Revenue.