Hearing in Perrigo’s €1.6bn tax claim case to be held next November
A HEARING related to a €1.64bn tax assessment by the Revenue Commissioners against US drug firm Perrigo is now slated to be held in November by the Tax Appeals Commission.
Last November, the High Court here upheld a 2018 assessment raised against Perrigo, which has its corporate headquarters in Dublin.
In 2018, the Revenue Commissioners hit Perrigo with the €1.64bn tax claim related to the drug company’s acquisition of Irish pharma firm Elan in 2013. Eight months prior to its acquisition by Perrigo, Elan had sold a 50pc in multiple sclerosis treatment Tysabri to US pharma firm Biogen.
Elan received an upfront cash payment of $3.25bn from Biogen, as well as an ongoing royalty stream.
The upfront proceeds from the sale were counted by Elan as trading income, which attracts a 12.5pc corporation
tax rate.
But the Revenue Commissioners have argued that the cash proceeds should have been treated as capital gains, taxable at 33pc.
Mr Justice Denis McDonald concluded last November that Perrigo had failed to establish any basis for the court to interfere with the Revenue’s notice of assessment (NoA).
He stressed that the question of whether the disposal of the Tysabri intellectual property constituted a trading or a capital transaction is a matter that will have to be resolved in due course before a Tax Appeals Commissioner.
Perrigo has told shareholders in its newly published annual report that the November High Court ruling determined that the company’s constitutional rights and legitimate expectations as a taxpayer had not been violated.
“The Irish High Court did not review the technical merits of the NoA under Irish law,” Perrigo said in its annual report.
“The Tax Appeals Commission will now consider whether the NoA is correct as a matter of Irish tax law, which is currently scheduled to be heard in November 2021,” it added.
Perrigo said its Elan Pharma subsidiary will “continue to vigorously pursue its appeals” before the Tax Appeals Commission. No payment will be required by Perrigo in the case unless the appeal pending before the Tax Appeals Commission is finally determined against Elan Pharma.