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May 7, 2012
Takeda Pharmaceutical Company Limited
Takeda Submitted a Request for Reconsideration to the National Tax Tribunal
Relating to the Correction Notice on Transfer Pricing
Osaka, Japan, May 7, 2012 – On April 6, 2012, Takeda Pharmaceutical Company Limited (“Takeda”) received notice*1 that the Osaka Regional Tax Bureau (“ORTB”) had concluded its reinvestigation with respect to the 2006 correction notice*2 on transactions of Prevacid, a drug for the treatment of peptic ulcers, between Takeda and TAP Pharmaceutical Products Inc. (“TAP” *3), a 50/50 joint venture between Takeda and Abbott Laboratories. The ORTB concluded with a decision to reduce the original assessment amount of ¥122.3 billion in taxable income, by the amount of ¥97.7 billion.
Since receiving the ORTB notification, Takeda has been considering its contents and weighing possible next steps. Today, Takeda submitted a new request for reconsideration to the Osaka Regional Tax Tribunal, petitioning for the cancellation of the portion of the original correction that still remains after the conclusion of ORTB’s reinvestigation.
- *1 As a result of the conclusion of the reinvestigation, Takeda expects a refund of ¥57.1 billion, tax and interest combined, including local tax.
- *2 Takeda received the Correction Notice from the ORTB based on their conclusion that Takeda had earned an insufficient proportion of the profits earned in the U.S. market in relation to product supply and license transactions of Prevacid between Takeda and TAP over the six-year period from the fiscal year ended March 2000 through the fiscal year ended March 2005. Total additional tax due, including local tax, was ¥57.1 billion. Takeda paid these additional taxes in July 2006.
- *3 TAP had been a fifty-fifty joint venture between Abbott Laboratories and Takeda America Holdings, Inc. (“TAH”), a wholly owned subsidiary of Takeda located in New York. As a result of the April 2008 dissolution of the TAP joint venture, TAP became a 100% subsidiary of TAH. Also in June 2008, TAP was subsequently merged into Takeda Pharmaceuticals North America, Inc. (“TPNA”), a 100% subsidiary of TAH located in Illinois. In January 2012, TPNA changed its name to Takeda Pharmaceuticals U.S.A. Inc.
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