UK Lawmakers Accuse PricewaterhouseCoopers and Shire of Extensive Tax Avoidance Scheme
Published: Feb 06, 2015
February 6, 2015
By Krystle Vermes, BioSpace.com Breaking News Staff
Irish biopharmaceutical company Shire and accountancy firm PricewaterhouseCoopers have been accused of extensive tax avoidance by the U.K. British lawmakers are now urging the government to tighten the regulation of corporate tax advisors.
Thousands of documents released today showed that Shire had used 10 billion pounds of intra-company loans to shift profits to Luxembourg. By doing so, the company only needed to pay a tax rate of 0.0156 percent.
Reuters reported that PwC disagreed with the committee’s findings, but it noted that it should provide further explanation of its role in the tax system. A spokesperson for Shire told the news source that it considers its management of tax affairs to be “an appropriate and responsible part of its drive for efficiency.”
PwC’s top tax partner, Kevin Nicholson, is being accused of misleading parliament over complex Luxembourg financing structures, according to The Guardian. PwC allegedly helped set up the structures to help multinational companies avoid taxes.
“Contrary to its denials, the tax arrangements PwC promotes, based on artificially diverting profits to Luxembourg through intra-company loans, bear all the characteristics of a mass-marketed tax avoidance scheme,” Committee Chair Margaret Hodge told the news source.
However, Nicholson has stated in the past that the firm is not “in the business of selling schemes.” Additionally, he said that PwC does not mass-market tax products, produce tax products or promote tax products.
Shire’s Performance in the Third Quarter
Shire recently announced that it will be sharing its full year results for 2014 on Feb. 12, but it released its third quarter results back in October. At this time, the company published data that showed a 33 percent growth in product sales and a 32 percent increase in overall total revenues.
“Shire is well-positioned for future growth as we implement our plan to double product sales to $10 billion by 2020,” said Susan Kilsby, Shire’s chairman. “I am confident that Shire, as an independent company, will deliver long-term value to our shareholders and improved outcomes for patients.”
Shire’s largest business unit, Rare Diseases, also grew by 66 percent during this time period. The company noted that it was aided by its acquisition of ViroPharma.
“Our strong momentum and performance this quarter is evidence of our ability to deliver growth, efficiency and innovation through our commitment to addressing significant unmet need in Rare Diseases and high value specialty conditions,” said Flemming Ornskov, chief executive officer of Shire.
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