Pharmaceutical companies hint at tax move to Ireland

Source: Exec

Date :30/04/2008 12:10:13

AstraZeneca, the Anglo-Swedish pharmaceutical group, yesterday refused to rule out moving their headquarters to Ireland to reduce the impact of taxes in the UK.

An increasing number of pharmaceutical companies are relocating to Ireland where corporation tax is at 12.5 percent compared to Britain’s rate of 28 percent.

Last week GlaxoSmithKline’s outgoing chief executive Jean-Pierre Garnier hinted at a UK exodus unless there were changes to the tax regime.

UK media giant WPP has also warned that complex corporate taxation could force them to relocate.

Tax system

Fearing a tax exodus, Chancellor Alistair Darling yesterday launched a review of the competitiveness of the UK’s tax system after Shire, the UK’s third largest pharmaceutical company, and UBM both reported they will be shifting their headquarters to Ireland.

There are plans for a new working group which will discuss ways in which the tax system can provide long-term certainty to multinationals.

The Chancellor said: “I am determined that we do what is necessary to remain one of the world’s best places to do business – and critically to ensure that we maintain our strong and resilient economy and our position as the world’s leading financial centre.”

Meanwhile, the government has estimated that it could lose £1 billion in tax revenues if it caves into industry pressure to relax the proposed tax regime.

April 30, 2008