Health giant moves to low-tax Ireland – and blames Brexit
Edited by Jamie Nimmo
A US healthcare giant that controversially shifted its tax base to the UK is now plotting a money-saving move to Ireland – and is pinning the blame on Brexit.
Steris, a $10 billion (£7.5 billion) Ohio firm that employs 12,000 people globally, has told shareholders that Britain’s departure from the EU could cost the business $50 million if it retains a corporate base in Derby.
The company has been based in the UK for tax purposes since late 2015 when it completed a $1.9 billion takeover of British firm Synergy Health. This was one of a number of controversial ‘tax inversion’ deals that American firms completed before they were outlawed by former US President Barack Obama in 2016.
Such arrangements allowed large US companies to take on the corporate base of smaller takeover targets and as a result pay less global tax. In one of the most highprofile cases, US pharma firm Pfizer tried – but failed – to buy UK rival AstraZeneca for nearly £70 billion.
At the time when Steris agreed to buy Synergy, US corporation tax was 35 per cent – compared with the UK’s 20 per cent. Ireland, which has a corporation tax rate of 12.5 per cent, has proved to be a popul ar destination for companies organising inversion deals.
Steris bosses have told its shareholders they fear the firm could lose out on tens of millions of dol- lars of benefits from ‘certain tax and other treaty arrangements’ after Brexit.
A statement from Steris said: ‘The board concluded that the redomiciliation to Ireland and retaining Steris’s status as a European Union domiciled company is the best path forward for Steris.
‘Retaining the company’s domicile in the European Union is anticipated to preserve the current and future financial benefits initially established in 2015 at the time of the combination with Synergy. Steris believes that more than $50 million in future US financial benefits supported by tax treaties between the US and the European Union will be at risk if the company remains domiciled in the United Kingdom after Brexit.’
The company estimates the cost of switching to Ireland – which is not expected to affect the day-today operations of the business – will total around $10 million.
Shareholders in Steris, which is l i sted on the New York Stock Exchange, are being asked to vote on the move at a general meeting.
In its latest annual report, the company said it had paid $63 million in income taxes on profits of more than $1 billion.
This represented an effective corporation tax rate of 18 per cent. It is not clear how much of this tax would have been paid in the UK.
Steris declined to provide further details of its reasoning for the move to Ireland or to explain what ‘ t reaty arrangements’ it would lose out on.