[font=verdana,geneva,arial,helvetica,sans-serif]in the biggest tax settlement in u.s. history, the drug giant glaxosmithkline p.l.c. has agreed to pay $3.4 billion to the federal government.
glaxosmithkline said it was settling to avoid a far bigger potential hit from allegations that it undervalued its u.s. profit on nine products - including the heartburn medicine zantac and the asthma drug advair - between 1989 and 2005, reported the inquirer
. the large settlement was seen as a victory for the irs in its long battle against "transfer pricing," in which multinational firms ascribe revenue from intangible products like patents and development rights to subsidiaries in low-tax countries, and allocate expenses to high-tax countries, as a way of minimizing taxes, the inquirer
noted. glaxosmithkline admitted no wrongdoing in the settlement and insisted it allocated its revenues and expenses fairly among its u.s. and british subsidiaries, the inquirer
, september 12, 2006