The chief executive of FTSE 100 pharmaceutical company Shire has revealed that the company is satisfied with the results of its relocation for tax purposes from the UK to Ireland and suggested that it would take a more than a substantial tax cut to lure the company back.
Commenting on the company's semi-annual results, which beat market expectations, Shire chief Angus Russell said that the company is "very happy" with its recent decision to shift its corporate HQ to Ireland and indicated that there was little that the UK government could do to improve its current tax position.
"If you want to drop the tax rate to 5% we might be interested," he was quoted by the Daily Telegraph as saying.
According to a report in the Financial Times last month, one of the benefits of re-domiciling the company for tax purposes in Ireland is that it will avoid paying tax on its GBP260mn acquisition of German biotech company Jerini, which it would have done under new rules introduced in the UK in 2008.
Shire plc, one of the UK's largest drug makers, announced its plans to "protect the group's taxation position" by establishing a holding company in Jersey and moving the company's tax residence to Ireland in April, and was followed by a flurry of other major UK multinationals who announced similar plans in the following weeks.
"Shire has concluded that its business and its shareholders would be better served by having an international holding company with a group structure that is designed to help protect the group’s taxation position, and better facilitate the group’s financial management," the company announced in a statement.
Other companies expressing the growing discontent being felt by large corporations at the UK's increasingly confused international taxation position include advertising agency WPP and United Business Media.
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