Glaxo to Contest $5.2Bn US Tax Bill ; Inland Revenue Talks with American IRS Break Down after UK Authority Backs European Drugs Maker

By Reece, Damian | The Independent (London, England), January 8, 2004 | Go to article overview
Save to active project

Glaxo to Contest $5.2Bn US Tax Bill ; Inland Revenue Talks with American IRS Break Down after UK Authority Backs European Drugs Maker


Reece, Damian, The Independent (London, England)


GLAXOSMITHKLINE, Europe's biggest drugs company, was hit with a $5.2bn (pounds 2.9bn) tax bill yesterday from authorities in the United States in a dramatic transatlantic tax row that has dragged in the Inland Revenue, which is backing Glaxo over the dispute.

After receiving the claim on Tuesday, Glaxo immediately went on the offensive yesterday, announcing that it planned to take the American Internal Revenue Service (IRS) to court to contest the tax claim.

The UK's Inland Revenue was brought in by Glaxo late last year to help resolve the dispute, which relates to the seven years between 1989-1996. However, talks between IRS officials and the Inland Revenue collapsed after UK officials sided with the Glaxo view that no additional taxes were payable, according to the company's version of events. Neither the IRS nor the Inland Revenue would comment on the dispute, citing confidentiality rules surrounding individual tax cases.

What amounts to one of the biggest Anglo-American tax rows in history is likely to escalate as a second argument is brewing over Glaxo's US tax payments covering 1997-2000. GSK said it was expecting to receive an additional bill for this period from the IRS, although it refused to say what it expected this claim to total.

The tax claim detailed yesterday is equal to 52 per cent of Glaxo's last declared pre-tax profits of pounds 5.5bn, after restructuring and merger costs.

The company, formed by the merger of Glaxo Wellcome and SmithKline Beecham three years ago, said it had made adequate provisions in the past for potential tax liabilities amounting to pounds 1.45bn. However, it refused to say what proportion of this was earmarked to pay claims from the US. It also said the trial resulting from its decision to file a petition in the US tax court was not expected until sometime in 2005-2006.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
Loading One moment ...
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited article

Glaxo to Contest $5.2Bn US Tax Bill ; Inland Revenue Talks with American IRS Break Down after UK Authority Backs European Drugs Maker
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.

Are you sure you want to delete this highlight?