Pfizer is currently waiting for AstraZeneca to except their proposal then the move of their headquarters to London will seal their wishes.
The legislative director of Citizens for Tax Justice, Steve Wamhoff a public advocacy group feels Pfizer should be more concerned about their taxes. Wamhoff believes “Pfizer is just going to be moving paper around, while pretending to be a foreign company when in reality they are simply trying to avoid paying their U.S taxes”. (Should this be allowed)? Hopefully, congress will take note of this and call for action.
It would appear: Home is not where the heart is….It’s where lower taxes are for Pfizer.
Evidently Pfizer came from that time period where businesses open their headquarters in places like: Bermuda so they can practice tax inversion, this was a very popular technique up until 2004, when Congress stepped in and changed the law, making companies who had 80% ownership in the U.S. subject to taxes.
Now, big companies are getting more clever with finding ways to hold on to their profit’s, and tax inversion is raring it’s ugly head once again only this time its wearing a different label. Take a look at Liberty Global, Perrigo, and even Chiquita (that’s right the fast on the go breakfast snack) they have all admitted to buying foreign companies and shifting their head quarters, and they each claimed the foreign move was to lowered their tax burdens. Maybe we all should open a yo-yo business in a foreign country and move to lower our tax burdens.
Michael Kirsch a former international tax counselor for the U.S. Treasury and a law professor at Notre Dame believes “that the recent mergers between U.S. companies and foreign firms are aimed at circumventing the restrictions of the 2004 law”.
Normally when there is a merger it means that a firm or company has fallen below 80% of their domestic ownership threshold. (Pfizer is not faced with this issue).
So, even though Pfizer will be opening its head quarters in London, the executives and staff working in the U.S. will more than likely continue to live in the U.S.
There has been some concern from Pascal Soriot the AstraZeneca CEO he testified before the British parliamentary committee where he openly expressed his objections to Pfizer’s proposal. Pascal Soriot, questions whether or not Pfizer is committing tax inversion. Pascal Soriot is also concerned that this can negatively impact the reputation of AstraZeneca.
Ask yourself, is it really fair to allow these businesses to do most of their business in the United States and benefit from public investments that we pay for? Is it time to crack down on companies that practice tax avoidance? Why does tax avoidance work for large companies operating in foreign countries and no one else?
About the Author:
Hello, I’m Blair Thomas and I’m an electronic payment expert and the co-founder of eMerchantBroker.com from Los Angeles, CA, the High Risk Merchant Account Processor in the country. I enjoy hiking, dining and discovering new music. When I’m not working in the electronic payments industry, you can most likely find me producing and writing music. Add me to your circles at Google +