Pfizer Korea receives tax audit...files tax appeal

states that “the cost overstatement allegations are false”

Pfizer Korea “the levied fines were determined unreasonable… duly requested a trial”

“Much of the additional taxes were imposed due to business transformations such as corporate reorganization and M&As, etc."

On why Pfizer Korea filed a “tax appeal” against the National Tax Service, the company said it had “duly instituted administrative procedures, judging that some of the imposed taxation standards were unreasonable,” refuting the allegations that the company was fined due to ‘cost overstatements.’ According to the pharmaceutical industry on the 26th, the National Tax Service levied fines on some Korean subsidiaries of multinational pharmaceutical companies including Pfizer Korea after tax audits.

 

Pfizer Korea did not disclose the specifics on its amount, but the amount is estimated to be in the tens of billion won range.

 

Pfizer Korea filed a tax appeal regarding the additional fine levied by the NTS on the company, claiming that the tax levied by the NTS was excessive.

 

Pfizer Korea said, “A tax appeal can be filed based on the reasonability of the taxation standards, regardless of the amount.

 

Judging that there were some unreasonable parts in the taxation standards, the company has been taking due process for the tax appeal.” The company stressed, “We have no intention to avoid taxes or exaggerate costs.” Pfizer Korea also drew the line on the so-called ‘cost overstatement’ allegations that were made, on the claim that the company had been writing the product's price higher than the existing price when importing products to increase profits for its headquarters.

 

The company stressed that the imposed fines were irrelevant to sales of the company’s COVID-19 vaccine or oral treatment.

 

The company explained, “the import price is set in consideration of various factors including the product’s cost and terms of transactions, etc.” The fines were imposed not due to cost exaggerations but as part of regular tax audits.

 

In particular, the company added that “the fine was imposed on taxes paid in 2015-2020, at a time unrelated to COVID-19.

 

The fines were levied as a result of a regular tax audit made every 5 years, regarding the taxes paid in 2015-2020, and has no relation to the company’s sales made related to COVID-19.” Pfizer Korea made nearly ₩1.7 trillion last year, ₩1.3 trillion of which is estimated to be from COVID-19 vaccines.

 

In 2020, before COVID-19 vaccines were imported, Pfizer Korea’s sales had been in the ₩300 billion range.

 

When adding the sales of its spin-off company, Viatris, the combined sales had been in the ₩600 billion to ₩700 billion range.

 

Pfizer Korea said, “The company has been faithfully filing its tax returns and payments so far, and will be judged through due process of the taxation standards that are deemed unreasonable on the company’s part."