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How Pfizer has shifted U.S. profits overseas for years

(Reuters) Drugmaker Pfizer's plans to take over Allergan have faced a political backlash in the United States over fears a deal would lead to the company shifting its headquarters and taxable profits to Ireland…
Ireland's tax rate is 12.5 percent, a fraction of the 35 to 40 percent levied in the United States.
President Barack Obama has described inversions as unpatriotic and last year changed some tax rules to make inverting less attractive. Allergan investors fear the U.S. treasury department may scupper a deal with additional measures…
Pfizer has used transactions between companies within its group to allow an Irish subsidiary based in Ringaskiddy - Pfizer Ireland Pharmaceuticals - to buy the rights to patents developed in the United States and then use them to make drugs which are sold back to U.S. affiliates.
Even though the Irish and other overseas units pay $3.2 billion a year in royalties to use such patent rights, the higher prices at which Pfizer in the United States imports manufactured drugs from affiliates means almost all the profits from these drugs are reported overseas.
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