Tax Service: Pfizer HCP Corporation pays Hr 31 million in taxes and fines to …
U.S.-based Pfizer H.C.P Corporation in Ukraine has transferred UAH 31 million in taxes and fines to Ukraine’s national budget.
According to the state register of court rulings in Ukraine, tax claims have been charged after a scheduled inspection by the State Tax Service at the corporation’s representative office. The inspection was checking observance of tax, foreign currency and other laws for the period between January 1, 2009 and March 31, 2010.
Kyiv’s District Administrative Court, while considering an appeal filed by the representative office against the decision taken by the Tax Service on the payment of additional tax liabilities, passed a ruling in favor of the tax authorities.
At the same time, the press service of the Tax Service of Kyiv announced on Friday, without naming a company, that “a Kyiv-based representative office of a U.S.-based pharmaceutical company has paid UAH 31 million in taxes and fines for abuse of benefits.”
“During the inspection of the office of the U.S.-based pharmaceutical company, which is engaged in market research and public opinion study in Ukraine, it was found that the office had imported medicines worth over UAH 21 million to Ukraine on a tax-exempt basis and conducted clinical trials of these drugs through its authorized representatives,” reads the announcement.
At the same time, the tax inspection did not reveal any documentary confirmation of the availability of the claimed medicines and their further use in Ukraine.
Moreover, Kyiv Tax Service said that the representative office had advertised medicines which were produced not only by the U.S. main company, but also by pharmaceutical corporations in other countries, which means it represented their interests.
“Following the inspection, tax officers found groundless application of the double taxation avoidance agreement between the governments of Ukraine and the United States of America, which could exempt the company from the payment of corporate profit tax, and charged UAH 31 million in taxes and fines, which were to be additionally paid to the budget,” reads the announcement.
The representative office challenged the tax authorities’ decisions in administrative and judicial proceedings.
“Having considered the case, the court ruled taxmen’s action lawful, therefore the representative office of the U.S.-based company had to transfer the additionally charged amount to the budget,” the Tax Service summed up.
U.S. Pfizer Inc., one of the world’s largest pharmaceutical companies, reduced net income in the third quarter of 2012 by 14% year-over-year. In the third quarter, net income attributable to the company slid to $3.21 billion or $0.43 per share from $3.74 billion or $0.48 per share, in the prior-year quarter.
Adjusted earnings per share for the recent quarter totaled $0.53. In the prior year, the company posted adjusted earnings of $0.60 per share.
Revenues decreased by 16% compared to the third quarter of 2011, to $15.06 billion. The decrease was connected with the loss of exclusivity of its top-selling drug, Lipitor.
For the full year 2012, the company now sees adjusted earnings per share of $2.14 to $2.17, compared to the prior outlook of $2.12 to $2.22 range. Its board authorized a new $10 billion share repurchase program upon sale of its nutrition business.
The price of Pfizer’s shares went up by 29% in the past 12 months.