It has been confirmed that they are in talks to create the world’s largest pharmaceutical firm – if they do join forces the pair will hope to benefit from Ireland’s 12.5% corporation tax rate.
Allergan is based in Dublin, a merger could allow Pfizer to shift its tax residency to Ireland – meaning that it would pay the low Irish tax rate, instead of the 35% that it is currently paying in the US.
A person familiar with the negotiations has told Reuters that the issue of tax inversion is being discussed as part of the talks. Hillary Clinton’s camp has been out quickly in response to the proposed deal,
“[we are] committed to cracking down on so-called tax inversions where a company chooses to leave the US on paper to game the tax system,”
a spokesman for her campaign said New York Democratic Senator, Charles Schumer said the continued pursuit of inversions showed there was a lot more work to be done to stop corporations organising their global operations to reduce their tax bills.
Billionaire activist investor Carl Icahn, a key-backer of the Donald Trump campaign and of tax reform, said the deal would result in the loss of the country’s 10th largest company to Ireland. Read more: Hillary Clinton objects to Pfizer possibly moving to Ireland for tax reasons – Newstalk