Like Amazon and Starbucks, drug giant AstraZeneca pays no UK corporation tax-despite posting global profits of around $2.2bn each year. It uses a tax avoidance scheme in the Netherlands that has been approved by HMRC, the UK tax collector.
It funnels around $2.7bn of ‘loans’ through a Netherlands subsidiary in an arrangement that was created after UK tax laws for multinationals were relaxed in 2013, the Guardian newspaper has discovered.
The British-Swedish conglomerate generates around $26bn in revenues each year from top brands such as Seroquel, an antipsychotic, the statin Crestor, and the antacid Losec.
The tax-avoidance scheme is centred on its Dutch subsidiary, which has received loans of $2.7bn from the London head office, despite having no staff on the payroll and only modest operating costs.
Astra-Zeneca’s head office charges $140m interest for the ‘loan’ which the Dutch and UK tax authorities each allow as being on their own ‘patch’ in a double tax break known as double dipping.
The scheme may soon come to an end, however, as the Organisation for Economic Co-operation and Development (OECD) looks to tighten up on tax avoidance by multinationals. It has said that the current rules have been so abused that “they are close to breaking point”.
(Source: The Guardian, October 5th, 2015)
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