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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