The British government’s incentive program designed to convince companies to locate research-and-development teams in the U.K. may be at the center of Pfizer’s planned takeover of AstraZeneca.
“The United Kingdom has created attractive incentives for companies to manufacture products and maintain and protect intellectual property, and we have seen that capital and jobs have followed these types of incentives,” Pfizer CEO Ian Read said in a Monday-morning statement designed to woo Astra shareholders (via the WSJ).
According to the Journal:
“When the patent box has been fully phased in by 2017, it will mean qualifying companies pay 10% tax on their profits derived from U.K.-held patents, compared with the current rate of 21% (the rate will fall to 20% in April 2015) […] A combined Pfizer and AstraZeneca would be incorporated in the U.K. (but listed in New York), Mr. Read said Monday, and would therefore be better placed to take advantage of the patent-box tax break on any new drugs developed in the U.K.”
Laura Gaze, Director, Thomson Reuters: The incentives under this new tax regime, which companies have been navigating through for the better part of two years, seem as though they are doing exactly as they were intended. But will this new structure derail Pfizer’s plan? This is an extremely complicated deal with many moving parts, so we may not have answers to these questions for a while, but it’s clear the patent box is set to be a very significant item that may decide many corporate agendas in the years to come.