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Novo Nordisk receive punitive tax of Dkr3.6 billion (Dkr1= USD 0.18)

Tuesday, 05 February 2013
Danish pharmaceutical company, Novo Nordisk A/S, which reported a 23 percent growth in fourth-quarter net profit recently, is being hit by the Danish tax authorities with a punitive bill of unpaid taxes.

The Danish insulin giant has lost a number of cases to the Danish tax authority and must now pay Dkr3.6 billion extra in taxes, the Danish business daily, Børsen writes.

The extra bill means that Novo Nordisk will pay much more in income tax in 2012. In 2012, the bill was Dkr7.9 billion from Dkr2.8 billion the year before. This represents more than 10 percent of the total Danish corporation tax.

The driver for this punitive taxes is reported to have been triggered by sales of medicines between Novo-owned companies in different countries.
According to Novo’s communications director, Mike Rulis, the company is always involved in one or more tax audits.
“Some go back many years, and many of them come to transfer pricing. I think you should see it as a coincidence that several cases ended in 2012,” says Rulis to Børsen.

In both Denmark and other countries, transfer pricing is a topic of discussion between authorities and industries. Countries are fighting with each other to ensure the groups’ tax payments are made in the country where the companies do business.

In Denmark, the number of cases of transfer pricing has increased from 47 in 2011 to 67 last year. It is said that the Danish tax authority is trying more cases, according to Jan Pedersen, professor of tax law at the University of Aarhus, Denmark.
by Scancomark.com Team

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