AstraZeneca Says U.K, U.S. Governments Reach Tax Pact on Transfer Pricing
AstraZeneca Plc (AZN), the second-biggest U.K. drugmaker, raised its profit target for the year after agreeing to settle U.S. tax and valuation matters.
AstraZeneca will pay a net $1.1 billion to resolve the issues. The company had set aside $2.3 billion, and now will release some of that accrual, AstraZeneca said in a statement today. That will boost earnings by about $500 million in the first quarter, London-based AstraZeneca said.
The drugmaker raised its target for core earnings per share this year to a range of $6.90 to $7.20, up from $6.45 to $6.75, as a result of the accrual benefit and a projected lower tax rate throughout the year.
AstraZeneca fell 1.5 pence to 2,872.5 pence in trading in London. The shares have declined 1.7 percent this year.
Tax authorities in the U.S. and the U.K. agreed on an advance pricing agreement regarding transfers between AstraZeneca’s international subsidiaries for the period from 2002 through 2014, the company said. AstraZeneca also agreed with U.S. tax authorities on a related valuation matter stemming from the integration of its U.S. businesses after the merger that created the company in 1999.
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