Pfizer under fire in U.K. for paying little-to-no corporate tax
Cue the critics: Pfizer paid no corporate taxes in the U.K. last year, the Daily Mail reports. The drugmaker ($PFE) actually managed to report an operating loss of £59 million ($92 million) in 2011, despite what the Mail calls a "whopping" £1.8 billion ($2.9 billion) in sales there.
The revelation comes as corporations in the U.S. are fighting for a lower tax rate and amid similar no-taxes-paid examples stateside. General Electric ($GE), for instance, was lambasted earlier this year for its low-to-nonexistent tax liability. And Pfizer itself was questioned by U.S. officials earlier this year; the Securities and Exchange Commission asked why it reported losses in the U.S. and profits overseas, when 40% of its sales derived from the U.S.
Pfizer explained the U.K. losses this way: "Due to a number of factors including the level of investment Pfizer makes into the U.K. and restructuring costs, Pfizer actually generated losses in the U.K. in 2011," the company said in a statement. "Under U.K. tax law, corporation tax is calculated on profits not turnover. … At all times and wherever we operate, Pfizer complies with the appropriate rules and regulations."
Pfizer is hardly alone in the U.K. Starbucks ($SBUX), Google ($GOOG), Amazon ($AMZN) and eBay ($EBAY) all pay "relatively little tax," the Mail reports, triggering a public outcry. Critics cite tax-avoidance strategies--such as reporting profits in low-tax jurisdictions--that have come in for criticism in the U.S. as well.
Some high-powered members of Parliament recently slammed Britain's top tax official for "failing to get to grips with tax avoidance," the Mail says. The MPs are questioning execs from big-name companies during hearings today.
- read the the Mail story
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