Thursday, September 28, 2006

Merck: Only the Little People Pay Taxes

Ahhhh... Nothing like Merck getting caught evading taxes to start off the day. Pharmagossip has a summary of the story in the Wall Street Journal which details Merck's tricky accounting procedures related to this scandal.

"Thirteen years ago, Merck set up a subsidiary with an address in tax-friendly Bermuda, in partnership with a British bank. Merck quietly transferred patents underlying the blockbuster drugs to the new subsidiary, according to documents and people familiar with the transaction. Merck then paid the subsidiary for use of the patents.

The arrangement in effect allowed some of the profits to disappear into a kind of Bermuda triangle between different tax jurisdictions. The setup helped Merck slash $1.5 billion off its federal tax bills over roughly the next 10 years."

Check out the story on PharmaGossip or over at the Wall Street Journal.

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