Forget Apple. It's time to collect from tax-dodging Gilead, tax group urges U.S. Treasury
EU antitrust regulators this week cracked down on Apple, ordering the American tech giant to fork over about $14.5 billion in taxes--plus interest--to the Irish government. The watchdogs had decided that Apple's profit-routing scheme through tax-advantaged Ireland was illegal.
Gilead Sciences might be in line for a similar European crackdown. But one U.S. advocacy group--which wants similar justice for Gilead--marks one crucial difference: It wants the California-based biotech to pay the tax bill at home.Earlier this month, Americans for Tax Fairness (ATF) penned a letter to U.S. Treasury Secretary Jacob Lew and Commissioner John Koskinen, drawing attention to alleged tax-avoidance moves by the drugmaker. The group says moving sales through Ireland increased Gilead's pre-tax profits fivefold between 2013 and 2015--from $4.2 billion to $21.7 billion. The moves also triggered a threefold jump in untaxed offshore profits, from $8.6 billion to $28.5 billion.By shifting around its profits, Gilead scored $9.7 billion in tax savings, even as its worldwide revenues tripled, ATF says--and considering that the Foster City, CA-based biotech generated two-thirds of its 2015 top-line haul in the U.S., the group has a serious problem with that fact.“We urge the administration to bring the full force of your enforcement capabilities against Gilead to collect the tax dollars that rightfully belong to the American people,” ATF wrote.Gilead refused to comment on the ATF's efforts or the organization's letter to Treasury.So how is Gilead slashing its tax payments, even as revenues climb? ATF suspects the company is declaring its offshore profits in tax-advantaged Ireland, where blockbuster hep C star Sovaldi has been domiciled since 2013. That way it doesn't owe taxes in the U.S.--and under a "double Irish" structure, wouldn't have to pay up in Ireland, either.Gilead wouldn’t be the only company to employ such a setup, the Irish publication The Journal notes. Plenty of others use the “double Irish” structure, which allows companies with headquarters outside the country to go unrecognized as “tax residents” under Irish law. The result? No obligation to pay corporate taxes to Ireland.It’s a loophole the Irish government closed with its 2015 budget, The Journal notes. But those that were already using it can continue doing so till 2020, to allow them time to restructure their tax affairs.It's not as if ATF wants Ireland to reap Gilead's tax revenue, however. The company shouldn't get itself off the hook completely, the group says, but neither should Ireland collect taxes Gilead should owe to its home country.“Instead of allowing massive profit shifting by an American company and then pleading with EC officials not to pursue collection of unpaid taxes to Ireland, ATF urges the United States to bring its full enforcement resources to bear to immediately investigate Gilead’s profit-shifting tactics so that the correct amount of income is reported--and the correct amount of taxes are paid--here in the first place,” it wrote.ATF is far from the only organization that’s fed up with Gilead’s business practices. Earlier this year, the California-based AIDS Healthcare Foundation launched a “Gilead Greed Kills!” campaign taking the Big Biotech to task for allegedly delaying development of a low-toxicity HIV med--now on the market as Genvoya--in order to keep prices high on fellow drug Viread until its patent was close to expiration.by Carly Helfand | Aug 30, 2016
Source: http://www.fiercepharma.com/
