Assessment focussed on deal over the sale of the multiple sclerosis drug Tysabri
However, the High Court found Perrigo had failed to establish any basis to interfere with the assessment which arose from what Revenue claimed was an underpayment of tax in a deal over the sale of the drug Tysabri.
The transaction giving rise to the assessment involved the sale to Biogen in 2013 of Perrigo’s remaining 50% interest in the intellectual property relating to Tysabri, used to treat multiple sclerosis and Crohn’s disease.
Revenue characterised this sale as a capital transaction, eligible to be taxed at a rate of 33% rather than a trading transaction as part of its corporation tax returns, which would have attracted tax at 12.5%.
The High Court found Perrigo had failed to establish any basis to interfere with this decision.
Perrigo had appealed the assessment to the Tax Appeal Commission and the High Court has ruled it will be up to the Commission to decide if the deal was a capital or trading transaction.
In a statement, Perrigo said it would now assess whether or not to appeal today’s ruling or proceed to the Tax Appeals Commission to challenge the assessment.
The company’s President and CEO, Murray S Kessler, said they continued to feel strongly that the company had had a legitimate expectation that Revenue would not “retrospectively, uniquely and without warning” recharacterise Perrigo’s trade and issue an assessment in this manner.
He said the company was disappointed the judge did not see it that way. But he said the judicial review was just one pathway available to the company.
Mr Kessler said they strongly believed the company would prevail on the merits of the assessment at the Tax Appeals Commission.
He said Perrigo would continue to vigorously defend its position on behalf of shareholders.