Takeda Receives Decision by the Irish Tax Appeals Commission Relating to Tax Assessment on Break Fee Shire Received from AbbVie
Takeda Pharmaceutical Company Limited (TSE:4502/NYSE:TAK) announced a decision from the Irish Tax Appeals Commission on July 30, 2021, upholding a tax assessment related to a break fee from AbbVie Inc. received by Shire plc, which Takeda acquired in January 2019. The assessment amounted to 398 million EUR. Takeda plans to appeal this decision and will record a provision estimated at approximately 63 billion JPY in its financial statements for Q1 FY2021. This provision will not affect Takeda's Core or Underlying financial results for the fiscal year ending March 31, 2022.
- The decision will not impact Takeda’s Core or Underlying financial results for FY2021.
- Takeda intends to appeal the decision, demonstrating proactive legal engagement.
- Takeda must record a provision of approximately 63 billion JPY due to the tax assessment.
- The decision upholds a significant tax liability from the acquisition of Shire.
Takeda Pharmaceutical Company Limited (TSE:4502/NYSE:TAK) (“Takeda”) today announced the receipt of a decision by the Irish Tax Appeals Commission on July 30, 2021 (IST) to uphold the Irish Revenue Commissioners’ position related to the treatment of a break fee received by Shire plc (“Shire”) in October 2014 from AbbVie Inc. (“AbbVie”). Shire was acquired by Takeda in January 2019. Takeda intends to challenge this outcome through all available legal means including appealing the decision to the Irish courts.
On November 28, 2018, Shire received a tax assessment from the Irish Revenue Commissioners for 398 million EUR. This assessment sought to tax a 1,635 million USD break fee Shire received from AbbVie in connection with the terminated offer to acquire Shire made by AbbVie in 2014. Takeda appealed this assessment, and in late 2020 a hearing took place before the Irish Tax Appeals Commission.
While Takeda is continuing to assess the substance of the decision, the company will record a provision for the case in the consolidated financial statements for the fiscal quarter, which ended on June 30, 2021 (“Q1 FY2021”), as a subsequent event that relates to a condition that existed as of June 30, 2021. The provision is currently estimated at approximately 63 billion JPY including interest accrued through June 30, 2021. In addition, to reflect the impact of the provision, Takeda will revise its “Summary of Financial Statements for the Three-month Period Ended June 30, 2021" (IFRS, Consolidated) and intends to re-file the revised information with the Tokyo Stock Exchange no later than August 6, 2021 (JST). Takeda will also revise other Q1 FY2021 financial materials to reflect the impact of the provision, and publish them on its website by August 6, 2021 (JST). There is no change to Takeda’s Q1 FY2021 Core and Underlying financial results, as the tax charge resulting from the decision is a non-recurring item considered unrelated to Takeda’s ongoing operations. To view the updated materials, once available, please visit: https://www.takeda.com/investors/financial-results/.
At this time, Takeda is not revising its forecast for the full fiscal year ending March 31, 2022 (“Full Year FY2021”). Takeda will update its Full Year FY2021 consolidated financial forecasts (based on IFRS) at the appropriate timing by taking this decision as well as other factors into consideration. This decision will not impact the Full Year FY2021 outlook for Core or Underlying financial results.
About Takeda Pharmaceutical Company Limited
Takeda Pharmaceutical Company Limited (TSE: 4502/NYSE: TAK) is a global, values-based, R&D-driven biopharmaceutical leader headquartered in Japan, committed to discover and deliver life-transforming treatments, guided by our commitment to patients, our people and the planet. Takeda focuses its R&D efforts on four therapeutic areas: Oncology, Rare Genetics and Hematology, Neuroscience, and Gastroenterology (GI). We also make targeted R&D investments in Plasma-Derived Therapies and Vaccines. We are focusing on developing highly innovative medicines that contribute to making a difference in people’s lives by advancing the frontier of new treatment options and leveraging our enhanced collaborative R&D engine and capabilities to create a robust, modality-diverse pipeline. Our employees are committed to improving quality of life for patients and to working with our partners in health care in approximately 80 countries and regions. For more information, visit https://www.takeda.com.
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FAQ
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