How did Merck record an 11% tax rate last year? The Senate finance chairman would like to know
With tax day right around the corner in the U.S., Merck & Co. is the latest Big Pharma to find itself in the crosshairs of a congressional tax probe.
Sen. Ron Wyden (D-Ore), the chairman of the Senate Finance Committee, on Monday wrote to Merck CEO Robert Davis asking how the company managed to pay a tax rate of just 11% last year. As Sen. Wyden notes, Merck's "legal domicile" is in the U.S., and that's where most of the company's R&D activities take place.
But despite recording $22.4 billion in U.S. sales last year, Merck reported just $1.85 billion in pretax income, the senator pointed out. That compared with international pretax income of more than $12 billion from about $27 billion in international sales.
Sen Wyden demanded several documents, including IRS form 8975 for the past three years, which provide a country-by-country account of the company’s pretax earnings.
Merck has until April 15 to respond to the senator’s letter.
Apr 6, 2022
