Pfizer

darkpagandeath

Deal gone down the Pan so to speak, Is this a good or a bad thing. Inversions seem to be the norm in saving tax. Also a hugely profitable company could shed a load of jobs in doing so. For me it just shows they are out just to save as much tax as possible.

http://www.rte.ie/news/2016/0406/779787-pfizer-allergan-merger/

Utah

They're pipeline isn't great so they're just buying a future for themselves.
I would have thought it was a good thing for jobs in Ireland.

They're a business, they're going to try make/save as much money as possible!

BattleCorp

darkpagandeath wrote: »

Deal gone down the Pan so to speak, Is this a good or a bad thing. Inversions seem to be the norm in saving tax. Also a hugely profitable company could shed a load of jobs in doing so. For me it just shows they are out just to save as much tax as possible.

http://www.rte.ie/news/2016/0406/779787-pfizer-allergan-merger/

They can come back and try again in three years and it won't be against the rules.

It would have been good for Ireland seeing as we would have benefited from extra tax.

By the way, the first job of a Company is to make money. Saving on your tax bill is a very effective way of increasing your profits. That's the aim of every business so we can hardly be critical if they can legally cut down on their tax bill.

Niemoj

Ah well.

AtomicHorror

darkpagandeath wrote: »

Deal gone down the Pan so to speak, Is this a good or a bad thing. Inversions seem to be the norm in saving tax. Also a hugely profitable company could shed a load of jobs in doing so. For me it just shows they are out just to save as much tax as possible.

http://www.rte.ie/news/2016/0406/779787-pfizer-allergan-merger/

Not sure I get the justification for action by the US Treasury, beyond them wanting Pfizer's tax. Are they really entitled to it, if Pfizer decide they want to operate somewhere else?

How does tax work for American migrants to Europe? Do they still pay tax in the US on earnings here?

Utah wrote: »

They're pipeline isn't great so they're just buying a future for themselves.

Wouldn't be sure about that. The trend with big pharmas these days is to minimise the risk of investing in research by waiting for small pharmas to develop a new drug and then just buy the drug at a later development stage. Or buy the small pharma.

JustTheOne

BattleCorp wrote: »

They can come back and try again in three years and it won't be against the rules.

It would have been good for Ireland seeing as we would have benefited from extra tax.

By the way, the first job of a Company is to make money. Saving on your tax bill is a very effective way of increasing your profits. That's the aim of every business so we can hardly be critical if they can legally cut down on their tax bill.

True believe me, running a business is no easy job and you're effectively a tax collecting agent for the government but get paid nothing for it.

When you see how much taw you actually pay compared to your profit you have to be as prudent as possible.

BattleCorp

JustTheOne wrote: »

True believe me, running a business is no easy job and you're effectively a tax collecting agent for the government but get paid nothing for it.

When you see how much taw you actually pay compared to your profit you have to be as prudent as possible.

Tax accountants are worth their weight in gold if they are any good at their job.

sbsquarepants

BattleCorp wrote: »

.

It would have been good for Ireland seeing as we would have benefited from extra tax.

.

Bet you we wouldn't. That's why they come here. 12.5% on paper 1.25% in reality - if that.

BattleCorp

sbsquarepants wrote: »

Bet you we wouldn't. That's why they come here. 12.5% on paper 1.25% in reality - if that.

1.25% is better than nothing all the same.

JustTheOne

BattleCorp wrote: »

1.25% is better than nothing all the same.

And the tax paid from workers salaries each week by the company.

Agent Smith

JustTheOne wrote: »

And the tax paid from workers salaries each week by the company.

People always seem to forget that....

Larbre34

If we didn't learn our lesson about putting all our eggs in one basket when it came to relying on taxes from the housing boom for growth, the ending of these multi-national arrangements will certainly force us to diversify.....

blackwhite

AtomicHorror wrote: »

Not sure I get the justification for action by the US Treasury, beyond them wanting Pfizer's tax. Are they really entitled to it, if Pfizer decide they want to operate somewhere else?

How does tax work for American migrants to Europe? Do they still pay tax in the US on earnings here?



Wouldn't be sure about that. The trend with big pharmas these days is to minimise the risk of investing in research by waiting for small pharmas to develop a new drug and then just buy the drug at a later development stage. Or buy the small pharma.

US tax laws are some of the most swingeing in the world. The IRS claims the right to tax the worldwide income of all US Citizens, regardless of where they actually live or earn their income. It'd be a bit like the Irish Revenue Commissioners claiming that we were entitled to levy income tax on the Australian earnings of all the Irish emigrants in Australia, on the US earnings of all the Irish in the US, etc. etc.

When it comes to companies, the US has a rule that profits earned and taxed abroad can be taxed a second time if the cash is brought back into the US.

For a company like Pfizer, having a US top company means they can ever pay the foreign cash over to their shareholders without having to pay tax twice (and their shareholders also paying personal income taxes on the dividend payouts!).

The inversion deals aren't about reducing tax on US profits - the deals are about moving the business from a US topCo to and Irish topCo - and preventing the IRS from taxing the foreign profits a second time before funds can be passed onto shareholders by way of dividend (where they get taxed again in the country of the shareholder).

Sugar Free

Actavis, Jazz, Perrigo (Ireland HQ) and Mylan (Netherlands HQ) are other recent examples of inversion that I can think of. All far smaller than Pfizer, which is why they probably slipped under the Irish media's radar for the most part.

It's nothing new though in pharma (both originator and generics) given the level of M&A activity - both attempted and successful - in the last few years.

Capt'n Midnight

BattleCorp wrote: »

By the way, the first job of a Company is to make money. Saving on your tax bill is a very effective way of increasing your profits. That's the aim of every business so we can hardly be critical if they can legally cut down on their tax bill.

The thing to remember about Pfizer is that they are primarily a marketing company with a side line in pharma.

The biggest myth is that pharmaceuticals cost huge amounts because of R&D costs. Remember that they shove every expense into R&D they possibly can to avoid tax so real costs are actually less.


http://www.bbc.com/news/business-28212223
Pfizer Total revenue ($bn) 51.6
R&D spend ($bn) 6.6
Sales and marketing spend($bn) 11.4
Profit ($bn) 22.0
Profit margin (%) 43

Capt'n Midnight

It's hard for Pfizer but Allergan didn't look surprised.

myhorse

Capt'n Midnight wrote: »

It's hard for Pfizer .

hee hee

Geuze

Utah wrote: »

T
I would have thought it was a good thing for jobs in Ireland.

Tax inversions have very little impact on employment.

Geuze

sbsquarepants wrote: »

Bet you we wouldn't. That's why they come here. 12.5% on paper 1.25% in reality - if that.

No.

It's 12.5% on profits made in Ireland.

JustTheOne

Geuze wrote: »

Tax inversions have very little impact on employment.

You almost sound happy they wont be coming supplying jobs and revenue?

denismc

When companies merge there is usually a net loss of jobs as the companies will have assets and people that will not be required in the new company i.e two of everything.
Pfizer are already in Ireland so this would really be only a paper exercise for tax purposes, headquarters would still be in New York.

Geuze

JustTheOne wrote: »

You almost sound happy they wont be coming supplying jobs and revenue?

It would have little effect on employment, maybe a few extra staff.