What's going on with Merck's offshore tax practices as tax rate plunges to 11% and Senate Finance Chair Ron Wyden digs in
Senate Finance Committee Chair Ron Wyden (D-OR) is looking into the way pharma companies are using subsidiaries in low- or zero-tax countries to lower their tax bills. Wyden on Monday sent a stern letter to Merck’s CEO and president Robert Davis questioning the company’s ability to go from an effective tax rate of 22.9% in 2020 to less than half that a year later, down to 11% in 2021.
While the US accounted for $22.4 billion of Merck’s sales in 2021, Merck reported just $1.85 billion in pre-tax income in the US, Wyden explains, while also reporting $27 billion in sales internationally and international pre-tax income of more than $12 billion.
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