Advertise With UsAdvertise on our extensive network of industry websites and newsletters.
Get the PBR newsletterSign up to our free email to get all the latest PBR
news.As part of a long-running dispute with the US IRS, GlaxoSmithKline has received a claim for $1.9 billion in additional taxes that the US government asserts are outstanding for 1997 to 2000. GSK disagrees with this tax claim, however, and stated that it believes the taxes have been paid.
Subscribe to our email newsletter
The tax claim principally relates to the allocation of taxes on profits for Glaxo Wellcome products between the US and other countries. GSK estimates that the interest owing on this claim to date would be approximately GBP380 million ($700 million), net of federal tax relief.
On January 7, 2004, GSK announced that the company had received a notice of deficiency for $2.7 billion in tax for the years 1989 to 1996, and estimated the interest charge for this claim would be approximately $2.5 billion net of federal tax relief. In making the announcement GSK said that it expected to receive a similar notice for the 1997 to 2000 period.
The company continues to believe, based on external professional advice, that it has made adequate provision for tax liabilities which could arise from these tax assessments. GSK also continues to believe that the profits reported by its US subsidiaries for the period 1989 to 2000, on which it has paid taxes in the US, are sufficient to reflect the activities of its US operations.
The dispute between GSK and the IRS thus continues as GSK considers the additional tax claim to be inconsistent with the treatment of other pharmaceutical companies, including SmithKline Beecham. GSK plans to contest this claim for additional taxes.
GSK will ask the US Tax Court to consolidate the 1997 to 2000 claim with the case currently pending before the court for the 1989 to 1996 tax years. A provisional date for the trial has been set for October 2006.