Pharmaceutical giant AbbVie has brought a "precautionary" High Court action against the Revenue arising from a €587 million tax bill served on it after it acquired Allergen.
The €587 million was reduced to zero liability on appeal to the Tax Appeals Commission (TAC).
Revenue has appealed the TAC decision to the High Court, arguing the commission did not have the jurisdiction to make that ruling.
AbbVie last year acquired pharmaceutical company Allergen, which was headquartered and registered in Dublin, for $63 billion (€52 billion) return for cash and shares in AbbVie.
Takeover
As part of that deal, shares in Allergen were cancelled as a result of its share capital being reduced.
Arising out of the takeover, AbbVie was served with a €587 million tax assesment from Revenue after the Government introduced a measure in the 2020 budget that meant share cancellation schemes, which are schemes of arrangement, would be liable for a 1 per cent stamp duty. Previously, such schemes had been tax exempt.
AbbVie contested that assessment and, in a determination, the TAC found in AbbVie’s favour and reduced the assessment to nil. At the High Court on Monday, Michael Cush SC, for AbbVie, said the Revenue has sought to have the TAC determination go before the High Court, by way of a case stated – a request to have legal issues determined.
Counsel said a central part of the Revenue's case before the TAC was that the TAC lacked the jurisdiction to determine issues raised by Abbvie as part of its appeal against the €587million tax bill.
Assessment
Revenue also argued that AbbVie should have challenged the assessment in a High Court judicial review action, counsel said. Counsel said AbbVie’s view is such an argument is untenable and the TAC had jurisdiction to hear and determine all matters of law and fact relating to tax assessments.
Mr Cush said his client’s High Court application was “precautionary in nature,” and was being done in order to protect its position which was vindicated by the TAC.
It was being brought in the event that the High Court hearing the case stated finding the TAC did not have jurisdiction to hear the appeal, and such an appeal should have been brought by way of judicial review.
AbbVie did not want to find itself in a situation of being criticised for not bringing a judicial review within the permitted time frame allowed, counsel said. His client hoped the case stated will be decided in its favour and these judicial review proceedings would ultimately not need to be heard.
Review
In its judicial review proceedings, AbbVie seeks various orders, including quashing the assessment of July 2020. It also seeks a declaration that the €587 million assessment raised against AbbVie was unlawful and invalid.
It further seeks declarations that the 1999 Stamp Duties Consolidation Act is incompatible with an EU directive concerning indirect taxes and the European Convention on Human Rights.
The matter came before Mr Justice Charles Meenan, who said that it was an unusual application. He was satisfied to grant AbbVie permission, on an ex parte basis, to bring its challenge against Revenue and returned the matter to late March.
