AbbVie booked profits from Humira sales offshore
The investigation found that the Republican tax law has enabled AbbVie to generate the bulk of their sales and profits for brand name drugs like Humira in the United States while booking those profits offshore for tax purposes.
3 sourcesRead sources
businessinsider.com
AbbVie, for example, located the right to profit from Humira in its Bermuda subsidiary and manufactured the drug in Puerto Rico, which is considered outside the US for tax purposes since the island is a territory rather than a state.
finance.senate.gov
In 2020, 99% of AbbVie’s taxable income was reported by offshore subsidiaries.
However, AbbVie did provide information related to AbbVie’s taxable income for years 2018 – 2021, including how much of AbbVie’s taxable was reported by controlled foreign corporations (CFCs).
Data obtained by the Committee shows that AbbVie reports virtually no income in the U.S. for tax purposes Throughout the Committee’s investigation, AbbVie repeatedly declined to provide country-by- country information regarding AbbVie’s pre-tax earnings, profit margins, employee headcount and tax Letter from Scott Reents, Vice President, Tax and Treasury, AbbVie Inc., to Ron Wyden, Chairman, Senate Committee on Finance, Sep.
AbbVie’s ability to exploit subsidiaries in offshore tax havens to avoid paying billions of dollars in taxes on U.S. prescription drug sales signals a clear need to reform the international tax code.
In 2018, 95% of AbbVie’s taxable income was reported by controlled foreign corporations and AbbVie estimates that CFCs will report over 87% of AbbVie’s taxable income in 2021.
corporations and have had a significant impact on AbbVie’s effective tax rate.”9 The maneuvers employed by AbbVie to avoid paying U.S. taxes on Humira profits involve several key elements: 1.
The investigation found that the Republican tax law has enabled AbbVie to generate the bulk of their sales and profits for brand name drugs like Humira in the United States while booking those profits offshore for tax purposes.
AbbVie Biotechnology Ltd. is effectively a tax resident in Puerto Rico and the associated income from sales to AbbVie’s U.S. operations are reported on a Puerto Rico tax return.15 Since income from entities based in Puerto Rico are treated as foreign for tax purposes, income from Humira is taxed not at the U.S. corporate rate of 21%, but the much lower GILTI (Global Intangible Low- Tax Income) rate of 10.5% created by the Republican tax law.
Giant AbbVie Exploits Offshore Subsidiaries to Avoid Paying Taxes on U.S. Drug Sales Provisions in the 2017 Republican tax law allow AbbVie to generate most of its sales in the U.S., while reporting virtually no income in the U.S. for tax purposes.
It is imperative that Congress enact needed international tax reforms that would close loopholes that allow drug companies like AbbVie to stash their profits in tax havens.
The 99% of AbbVie’s income in 2020 that was reported by offshore subsidiaries was likely able to access the substantially lower GILTI rate of 10.5 percent.
finance.senate.gov
AbbVie Biotechnology Ltd. is effectively a tax resident in Puerto Rico and the associated income from sales to AbbVie’s U.S. operations are reported on a Puerto Rico tax return.15 Since income from entities based in Puerto Rico are treated as foreign for tax purposes, income from Humira is taxed not at the U.S. corporate rate of 21%, but the much lower GILTI (Global Intangible Low- Tax Income) rate of 10.5% created by the Republican tax law.
AbbVie’s ability to exploit subsidiaries in offshore tax havens to avoid paying billions of dollars in taxes on U.S. prescription drug sales signals a clear need to reform the international tax code.
However, AbbVie did provide information related to AbbVie’s taxable income for years 2018 – 2021, including how much of AbbVie’s taxable was reported by controlled foreign corporations (CFCs).
Senate Finance Committee Investigation Reveals Extent to Which Pharma Giant AbbVie Exploits Offshore Subsidiaries to Avoid Paying Taxes on U.S. Drug Sales Senate Finance Committee Chair Senator Ron Wyden, D-Oregon July 2022
It is imperative that Congress enact needed international tax reforms that would close loopholes that allow drug companies like AbbVie to stash their profits in tax havens.
The investigation found that the Republican tax law has enabled AbbVie to generate the bulk of their sales and profits for brand name drugs like Humira in the United States while booking those profits offshore for tax purposes.
Data obtained by the Committee shows that AbbVie reports virtually no income in the U.S. for tax purposes Throughout the Committee’s investigation, AbbVie repeatedly declined to provide country-by- country information regarding AbbVie’s pre-tax earnings, profit margins, employee headcount and tax Letter from Scott Reents, Vice President, Tax and Treasury, AbbVie Inc., to Ron Wyden, Chairman, Senate Committee on Finance, Sep.
In 2020, 99% of AbbVie’s taxable income was reported by offshore subsidiaries.
corporations and have had a significant impact on AbbVie’s effective tax rate.”9 The maneuvers employed by AbbVie to avoid paying U.S. taxes on Humira profits involve several key elements: 1.
1 Interim Report: Senate Finance Committee Investigation Reveals Extent to Which Pharma Giant AbbVie Exploits Offshore Subsidiaries to Avoid Paying Taxes on U.S. Drug Sales Provisions in the 2017 Republican tax law allow AbbVie to generate most of its sales in the U.S., while reporting virtually no income in the U.S. for tax purposes.
The 99% of AbbVie’s income in 2020 that was reported by offshore subsidiaries was likely able to access the substantially lower GILTI rate of 10.5 percent.
In 2018, 95% of AbbVie’s taxable income was reported by controlled foreign corporations and AbbVie estimates that CFCs will report over 87% of AbbVie’s taxable income in 2021.