A demand that drugs company Perrigo pay Revenue €1.6bn in a dispute over tax involving its 2013 acquisition of Elan and the multiple sclerosis drug Tysabri is a straightforward “tax 101” row, experts have said.
Nonetheless, the issue could be seen as a reminder for other multinationals still considering moving intellectual property into Ireland about the potential for large tax disputes.
The Revenue Commissioners want Perrigo, which has its head offices based in Dublin, pay around €1.6bn.
The dispute is about whether Perrigo should have paid a much higher rate of tax when it acquired Elan and Tysabri over five years ago. “It’s a tax 101 case,” said a corporate tax expert, involving a dispute between the appropriate rate of tax that a company should pay.
The big difference between the Perrigo case was it was a regular tax dispute between a company and a tax authority, while the finding by the EU that Apple has to repay the Government at least €13bn was based on state-aid law.
Another expert said that the dispute was “company-specific” but could still have effects by making multinationals think twice before shifting more intellectual property rights into Ireland. Corporate tax receipts this year have soared to about €10bn, as the tax base of multinationals based here expanded.
Perrigo had long signalled up the dispute. In its latest annual report, it also said it had outstanding issues with the US tax authorities over Tysabri.
“We have ongoing audits in multiple other jurisdictions the resolution of which remains uncertain,” it said.