GSK Rapped in the UK for Tax Arrangements

(MoneyWatch)  GlaxoSmithKline parceled out the legal locations of 40 drug brand names to various foreign countries such as Ireland and Puerto Rico in an effort to reduce the amount of tax it pays in the US and the UK, according to the Guardian. The result, the paper says is:

Glaxo pays on average more than 80% of its tax to overseas countries rather than to Britain. Last year as a result, although the British official tax rate has been 30%, and Glaxo's worldwide profits were ?£7.4bn, the company's actual UK tax bill was only ?£450m.

Glaxo says it is natural that most of its tax is paid overseas, where it has more than 80% of its 100,000 employees. The company claims more than 90% of its turnover is "not related to the company's UK subsidiaries". It is not clear how much more UK tax would be paid if the intellectual property created in the UK had been kept in the UK.

British pols are annoyed that the company creates its wealth in Britain but doesn't pay its share for the infrastructure it uses, according to the Hounslow Chronicle:

Twickenham MP and Liberal Democrat shadow chancellor Vince Cable backed the newspapers' campaign to shed light on the way big business protects profits from the UK tax system, writing: "Companies should pay the government of their host country for the infrastructure and other tax-financed services they receive: education, health, transport systems, policing."

US tax authorities are currently demanding $680 million in disputed payments from GSK; and the company paid the US a ?£1.7 billion pound tax settlement in 2007.