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http://www.smh.com.au/federal-politics/political-news/tax-avoidance-inquiry-calls-on-nine-big-pharma-bosses-to-explain-tax-contribution-20150619-ghrzw6.html

 

The bosses of nine of Australia’s largest multinational pharmaceutical companies will appear in front of a Senate committee investigating corporate tax avoidance.

Representatives from Pfizer, Johnson & Johnson, GlaxoSmithKline, Roche, Novartis, AstraZeneca, Sanofi, Eli Lilly, and Merck Sharp & Dohne have all been requested to appear at public hearings on July 1.

The next phase of the tax avoidance inquiry comes months after the headline-grabbing appearance of executives from Google, Apple and Microsoft who struggled to explain why those companies pay so little tax in Australia.

The move on “big pharma” came after Australian Tax Commissioner Chris Jordan told a Senate estimates hearing this month that at least four large drug makers are being audited by the tax office. “Clearly there are [ATO] investigations happening in that industry,” he said.

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Mr Jordan, who has said that the pharmaceutical industry displays “some of the attributes of the tech industry”, said the importation of drugs manufactured overseas and the payment of royalties for the intellectual property behind them made tax minimisation possible for the industry.

It also comes after Fairfax Media revealed that the five biggest suppliers of publicly subsidised medicines in Australia recorded sales of nearly $5 billion last year but paid an average of just $10 million each in company tax.

Research by the Parliamentary Library disclosed the tax contribution of multinational pharmaceutical companies, including Pfizer and AstraZeneca, makers of common cholesterol drugs Lipitor and Crestor, respectively.

It found Pfizer and Sanofi-Aventis both reported losses in Australia in 2014. Those companies received a combined $1.1 billion from the taxpayer for supplying medicines through the Pharmaceutical Benefits Scheme.

In total, the top five pharmaceutical suppliers to the PBS received $2.8 billion in public money. Their total Australian sales were $4.8 billion. But the research found their combined profits were a slim $50 million. They paid $53 million in tax between them – or roughly 1¢ in tax for every dollar earned in Australia

Sanofi-Aventis, which had sales of $883 million, received a $8.7 million tax credit from the ATO.

In 2013, the same companies paid just $47.5 million in tax.

A number of companies confirmed they had received invitations to appear.

Spokesman for Johnson & Johnson said: “The company is willing to appear. Johnson & Johnson’s Australian affiliates comply with all relevant tax laws in Australia and meets our taxation obligations based on the profits we make in Australia and other applicable legal requirements and obligations.”

A pfizer spokesman said: “Corporate integrity is a top priority for Pfizer. We are strongly committed to complying with all applicable laws and regulations, including tax and accounting laws, in Australia and wherever we do business,”

Read more: http://www.smh.com.au/federal-politics/political-news/tax-avoidance-inquiry-calls-on-nine-big-pharma-bosses-to-explain-tax-contribution-20150619-ghrzw6.html#ixzz42fnu5wzz

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