Glaxo pays $3.1bn to settle tax dispute

Pharmaceuticals giant GlaxoSmithKline today said it is to pay a net $3.1bn (€2.4bn) to settle a tax dispute with the US government.

The settlement covers a dispute with the US Internal Revenue Service for the period 1989 – 2000 which was due to go to trial in February next year, and also the period 2001-2005.

Glaxo said it had previously made provision for the dispute and the settlement would not have any significant impact on the company’s reported earnings or tax rate.

In a stock exchange announcement, the firm said: “GSK was confident of the strength of its position, but in view of the size of the potential financial exposure, as well as the continued level of resource being applied to the case, GSK concluded that it was in the best interests of its shareholders to reach this settlement, thereby removing the costs and uncertainty of future litigation.”