Pfizer's Tax Rate 'Fiction' Exposed: Pays Less Than Everyone You Know

Undermining the company’s rationale for a Big Pharma mega-merger that would allow it to dodge paying what it owes in taxes, a new report shows that, in fact, Pfizer has “dramatically overstated its corporate tax rates” and is already enjoying a significant competitive advantage over those who pay their fair share.

The world’s largest pharmaceutical company, which manufactures Viagra among other drugs, has cited high U.S. corporate tax rates as an argument in favor of a merger with Irish corporation Allergan. The business deal would likely take the form of what’s known as a “corporate inversion,” allowing Pfizer to renounce its U.S. tax citizenship while retaining its current U.S. headquarters, management structure, and facilities.

“Despite its self-serving claims, Pfizer is not at a competitive disadvantage operating under the U.S. tax system.”
—Frank Clemente, Americans for Tax Fairness

Click Here: Golf special

But the report from the coalition Americans for Tax Fairness—entitled (pdf)—indicates that Pfizer’s effective tax rate on its worldwide income was just 7.5 percent in 2014, compared with the 25.5 percent rate the company reported in its Securities and Exchange Commission (SEC) filings. 

Indeed, according to Americans for Tax Fairness, which analyzed the corporation’s SEC filings with the help of tax experts, “a fair reading of those filings is that the company’s reported income tax rates are largely an accounting fiction.”