GlaxoSmithKline, Europe's top drugmaker, is tied in a battle with the US Internal Revenue Service over allegations it avoided a significant portion of US taxes due on billions of dollars in drug sales, the Wall Street Journalhas reported.
The Journalreported that "little-noticed" documents filed with the US Tax Court show that Glaxo and the IRS now consider litigation likely over taxes on an entire decade of US revenue from six top selling products, including Glaxo's blockbuster ulcer drug Zantac.
According to the report, Glaxo had previously disclosed the dispute's broad outline. The IRS hasn't formally charged the company or said how much the company might owe in back taxes, interest and penalties, the Journaladded.
GlaxoSmithKline said today it was confident it had made adequate provision for any tax liability.
"Our view is that the profits reported by the US subsidiaries and taxed in the US fairly reflect the activities carried out in the US operations. And we continue to believe based on external advice that we have made adequate provision for any tax liability that could potentially arise from disputes with tax authorities," said a Glaxo spokesman in Britain.
The Journalsaid Glaxo's most recent annual report disclosed a broader category of potential world-wide tax liabilities and charges of 1.672 billion pounds, or about $2.4 billion.