UK pharma may be next to take up Irish tax residency

PHARMACEUTICAL COMPANY AstraZeneca yesterday declined to rule out moving its tax base outside the UK, possibly to Ireland.

The company already employs more than 80 people at AstraZeneca Pharmaceuticals (Ireland) Ltd, mostly in marketing and related functions at its Dublin offices.

When asked yesterday morning if the company was considering becoming tax-resident in Ireland, a company spokesman said: "We haven't ruled anything in or anything out." He also said there was no time line for a decision.

He said the company would meet senior British government officials "to make sure they understand the importance of the UK having a competitive tax regime".

Last week AstraZeneca reported a 3.7 per cent fall in first-quarter net profits to €960 million. There is concern in the UK at the decision of a number of high-profile companies to become tax-resident in the Republic.

The UK's third largest pharmaceutical company, Shire, and publisher United Business Media have decided to relocate their headquarters to Ireland for tax reasons.

According to a report in yesterday's Financial Times, WPP may also opt to relocate to Ireland due to Britain's corporate tax rules.

Chief executive Sir Martin Sorrell said the move could cut the group's £200 million tax bill by tens of millions per year. WPP's focus has become increasingly international. The moves have prompted British chancellor Alistair Darling to launch a review of the competitiveness of UK corporate tax. A number of companies are concerned at a proposal to change the tax treatment of UK companies with overseas subsidiaries to stop them reducing their bills by diverting profits to low-tax jurisdictions.

Multinationals are to be invited to sit on a new working group to advise ministers on the UK tax system. - (Additional reporting, Financial Times service)

...

Editorial comment: page 19