Teva Reaches Agreement With the Israel Tax Authority to Resolve All Pending Litigation for the Company's Taxable Years 2008-2020
Teva Pharmaceutical Industries (NYSE and TASE: TEVA) has reached an agreement with the Israel Tax Authority, resolving all ongoing litigation concerning taxes for the years 2008-2020. Teva will pay $750 million in installments from 2024 to 2029. Additionally, if Teva pays dividends or repurchases shares, it will incur an extra tax of 5%-7%, capped at approximately $500 million. This settlement allows Teva to close this historical tax issue and concentrate on its 'Pivot to Growth' strategy. The announcement does not affect Teva’s 2024 financial outlook. Teva is a global pharmaceutical leader, employing 37,000 people across 58 countries, and remains committed to contributing to Israel's economy.
- Resolution of all pending tax litigation for 2008-2020.
- Settlement allows focus on 'Pivot to Growth' strategy.
- No impact on Teva’s 2024 financial outlook.
- Teva to pay $750 million in installments through 2029.
- Additional 5%-7% corporate tax on dividends or share repurchases, up to $500 million.
Teva Pharmaceutical Industries Ltd. has entered into a noteworthy agreement with the Israel Tax Authority. This settlement involves the payment of
From a financial standpoint, this agreement might be seen as a positive development. The payment schedule's staggered nature mitigates any immediate strain on Teva's liquidity, allowing the company to manage its cash flows without significant disruptions. The additional conditional tax payment of 5%-7% on future dividends or share repurchases introduces a potential liability, but it is contingent on future financial actions that may or may not occur.
With no immediate impact on the 2024 financial outlook, as reaffirmed by the company, investors can view this settlement as a stabilizing factor. It offers clarity and predictability regarding Teva’s tax obligations, which is generally viewed favorably in the market.
It’s essential to understand that such settlements, albeit involving substantial amounts, are part of regular business for multinational corporations with complex tax structures. Ending this litigation aligns with Teva's long-term growth strategy, allowing it to channel resources and managerial focus toward growth and operational efficiency.
The tax resolution between Teva and the Israel Tax Authority removes a significant overhang from Teva's financials. For the market, the key takeaway is the elimination of uncertainty related to the tax dispute, which has been a lingering issue for years. This settlement can be seen as a strategic move to bolster investor confidence and stabilize market perception.
Paying
With Teva's commitment to its
By resolving its longstanding tax disputes, Teva has effectively removed a significant legal risk from its operations. Tax litigation, especially spanning multiple years, can be a major distraction and drain on managerial resources. Settling these issues provides Teva with a clearer legal and financial footing, essential for strategic planning.
The agreement’s structure, involving periodic payments and additional conditional taxes on dividends or repurchases, ensures that both Teva and the Israel Tax Authority have a clear understanding of the company's future tax obligations. Such frameworks are also beneficial in maintaining a stable and predictable business environment.
This resolution may also set a precedent for how other multinational corporations address their tax disputes, emphasizing the importance of negotiated settlements to achieve operational stability.
This allows Teva to end this historical income tax issue, and to continue to focus on its commitment to the health of patients and on the continued implementation of its "Pivot to Growth" strategy.
Under the terms of the agreement, it was further agreed that in the future event Teva pays dividends on, or repurchases, its equity interests, it will pay an additional
Today’s announcement has no impact on Teva’s 2024 financial outlook, which the Company reaffirms.
Teva is an Israeli global pharmaceutical company with 37,000 employees and operations in 58 countries around the world. As a global Israeli company, with its headquarters based in
About Teva
Teva Pharmaceutical Industries Ltd. (NYSE and TASE: TEVA) is a global pharmaceutical leader with a category-defying portfolio, harnessing our generics expertise and stepping up innovation to continue the momentum behind the discovery, delivery, and expanded development of modern medicine. For over 120 years, Teva's commitment to bettering health has never wavered. Today, the company’s global network of capabilities enables its ~37,000 employees across 58 markets to push the boundaries of scientific innovation and deliver quality medicines to help improve health outcomes of millions of patients every day. To learn more about how Teva is all in for better health, visit www.tevapharm.com.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are based on management’s current beliefs and expectations and are subject to substantial risks and uncertainties, both known and unknown, that could cause our future results, performance or achievements to differ significantly from that expressed or implied by such forward-looking statements. You can identify these forward-looking statements by the use of words such as “should,” “expect,” “anticipate,” “estimate,” “target,” “may,” “project,” “guidance,” “intend,” “plan,” “believe” and other words and terms of similar meaning and expression in connection with any discussion of future operating or financial performance. Important factors that could cause or contribute to such differences include risks relating to: our ability to successfully execute on the agreement entered into with the ITA; our ability to timely make payments required under the agreement with the ITA; our substantial indebtedness; our ability to successfully compete in the marketplace including our ability to develop and commercialize additional pharmaceutical products; our ability to successfully execute our Pivot to Growth strategy; other financial and economic risks; and other factors discussed in this press release and in our Quarterly Report on Form 10-Q for the first quarter of 2024 and in our Annual Report on Form 10-K for the year ended December 31, 2023, including in the sections captioned "Risk Factors.” Forward-looking statements speak only as of the date on which they are made, and we assume no obligation to update or revise any forward-looking statements or other information contained herein, whether as a result of new information, future events or otherwise. You are cautioned not to put undue reliance on these forward-looking statements.
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IR Contacts
Ran Meir +1 (267) 468-4475
Yael Ashman +972 (3) 914 8262
Sanjeev Sharma +1 (973) 658 2700
Media Contacts
Kelley Dougherty +1 (973) 832-2810
Eden Klein +972 (3) 906 2645
Source: Teva Pharmaceutical Industries Limited
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