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Monday, July 8, 2013

Sullivan: Pfizer's Tax Picture Dominated by U.S. Losses, Repatriation

Tax Analysts Martin A. Sullivan (Tax Analysts), Pfizer's Tax Picture Dominated by U.S. Losses, Repatriation, 140 Tax Notes 103 (July 8, 2013):

Like so many of its big pharma competitors, Pfizer is having trouble replacing its blockbuster drugs of decades past. The new-product pipeline is drying up, and competition from generic drug makers is relentless. ...  Like its drug business, Pfizer's tax situation is a jumble of events and trends that eludes easy interpretation. Look, for example, at its effective tax rate, shown in Figure 1. It is a roller coaster ride of ups and downs that on its own provides little information about where the company's tax burden has been or where it is going. Is Pfizer a high-tax or low-tax company? There are no easy answers to that question, just as there is no easy answer to whether Pfizer's future is promising or whether it is a sinking ship. This article investigates the factors behind Pfizer's volatile effective tax rate, its booked tax liability ($11.4 billion over the previous five years), and its actual cash payment to tax authorities for income tax ($21.7 billion over the same period). A comprehensive collection of Pfizer's tax data from 2005 through 2009 is at the end of the article.

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