PFIZER, THE world’s largest drug company, has denied allegations it set up a convoluted European shipping network via Brussels to avoid paying €300 million in German VAT.

Investigators in Mannheim have started a major investigation into the US company’s German operations, according to Der Spiegel magazine, and have requested the Garda in Dublin to examine Pfizer’s Irish operations.

Investigators in Mannheim have searched several Pfizer factories and production facilities to gather information after receiving a tip-off from a lorry driver nearly five years ago.

He told prosecutors in Stuttgart how he was required to ship Pfizer products from a production facility in the southwestern city of Freiburg to nearby Karlsruhe.

Rather than taking the direct route of 130km, the driver was instructed to bring the shipment to another Pfizer facility near Brussels, across the border, and spend the night there.

The following day the products were driven to Karlsruhe, a 1,000km detour investigators say was part of an elaborate scheme to avoid paying VAT on the products.

Pfizer has described the allegations as “unfounded”, but a team of top Pfizer executives has travelled from the US to meet German prosecutors, Der Spiegel reported.

According to the investigation, Pfizer has established Brussels as the centre of its European operations.

German investigators suggest the shipments of raw materials from Ireland to Freiburg for processing, also with a stop in Brussels, may have a similar tax-avoidance purpose.

Internal company correspondence suggests procedures were introduced after a company reorganisation in 2001.