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Last Updated: Wednesday, 7 January, 2004, 11:27 GMT
Glaxo fights '$5.2bn' US tax bill
An Indian researcher
Takeovers and mergers have made Glaxo a top global player
GlaxoSmithKline has vowed to fight a tax claim by US authorities which the UK drugs giant says could leave it owing up to $5.2bn (2.6bn).

Glaxo said it had received a tax bill for $2.7bn, which the US Internal Revenue Service (IRS) said was owed by Glaxo Wellcome from 1989 to 1996.

Europe's biggest drugs maker was formed from the merger of Glaxo Wellcome and SmithKline Beecham three years ago.

Glaxo said interest on the full claim would add around $2.5bn to the bill.

'Discussions collapsed'

The company said it planned to contest the claim for additional taxes by filing a petition in the US Tax Court, where it said a trial was not expected "until sometime in 2005-2006".

The additional tax claim... is inconsistent with the treatment of other pharmaceutical companies
GlaxoSmithKline

Glaxo said that it had previously attempted to resolve the issue by referring it to negotiations between the US and UK tax authorities.

However, the company said the discussions "collapsed" after UK officials backed Glaxo's line that it did not owe any additional taxes to the IRS.

Glaxo said it considered the additional tax claim to be "inconsistent with the treatment of other pharmaceutical companies", including legacy company SmithKline Beecham.

The firm said that it also expected to receive an additional assessment from US authorities for the period from 1997 to 2000.

In mid-morning trade, shares in GlaxoSmithKline on the London Stock Exchange were down 15p at 1245p.


SEE ALSO:
Glaxo bows to pressure over pay
15 Dec 03  |  Business
UK drugs giant in India tie-up
23 Oct 03  |  Business
Glaxo profits jump
22 Oct 03  |  Business
Glaxo in dock over Aids drugs
17 Oct 03  |  Business
Q&A: Glaxo defeated by shareholders
19 May 03  |  Business
Glaxo defeated by shareholders
19 May 03  |  Business


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