AstraZeneca, the pharmaceutical company, has settled a transfer pricing dispute with the UK tax authorities, covering claims against the company going back over 15 years.
"Under the agreement, AstraZeneca will pay £505m [$779 million] to HMRC to resolve all claims made by HMRC in relation to this issue for the 15-year period from 1996 to the end of 2010. The payment will be made by a first instalment of £350m in March 2010, and a second final instalment of £155m in March 2011...The settlement also resolves certain other outstanding UK tax matters." the company said in a statement.
The company is content with the outcome.
"The payment as agreed provided what we regard as a fair and reasonable outcome, given the different, but genuinely held, views of either side, and the uncertainty as to outcome in litigation," said Ian Brimicombe, global head of tax at AstraZeneca.
The case was expected to reach the first-tier tax tribunal in April and was set to last three months to four months. This joint referral by the company and HMRC has now been withdrawn. The first steps ordered by the tribunal led to the resolution of the dispute.
"The tribunal required that the sides meet to discuss the outcomes from the expert reports and factual witness statements. We complied with this request and the engagement led to the negotiated settlement," said Brimicombe.
Brimicombe was tight-lipped about whether the settlement would affect the company's transfer pricing structures in future.
"We are not disclosing the details of the agreement," he said.
