Bristol-Myers Targeted by Top Democrat on Offshore Tax Deal

(Bloomberg) -- The head of the Senate Finance Committee is seeking details from Bristol-Myers Squibb Co. about a decade-old offshore deal that let the pharmaceutical giant cut it’s tax rate by more than 30 percentage points.

Senator Ron Wyden sent a letter Tuesday to Bristol-Myers Chief Executive Officer Giovanni Caforio asking him to explain a 2012 transaction that shifted the company’s intellectual property profits to Ireland and resulted in its tax rate falling to -6.9% that year from 24.7% the year before. 

The Oregon Democrat also asked for details about how the company’s tax and legal advisers, accounting firm PwC and law firm White & Case LLP, were involved in the process. Bristol-Myers said in a statement it has received the letter and will cooperate with Wyden on his request.

“I am investigating the means in which large multinational corporations shift profits overseas as a way to avoid U.S. taxes,” Wyden said in the letter. “This includes the role played by professional services and law firms in assisting these corporations in the development and execution of abusive tax shelters that allow these businesses to pay a tax rate that is a fraction of that paid by the average hard-working American family.”

The inquiry comes as Democrats plans to impose new restrictions on corporations moving profits offshore have stalled in Congress. President Joe Biden’s Build Back Better Act included several new measures to regulate how U.S. companies operating abroad can move profits to foreign subsidiaries in lower-tax countries, as well as imposing a new 15% minimum tax on profits earned offshore.

Wyden asked the company to respond by Jan. 28.

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