GSK Canada

It's been a little while folks. I've been thinking I'm due for a new post and then I got the Ceteris TP Times dropped in my in-box.

Thanks to the kind people at Ceteris I was able to read about the GSK Canada case. I'm sure you've heard of it as well, but it seems to boil down to GSK Canada buying something from a Swiss sub with a transfer price at about five times what their competition was buying that same component for and using that component for the same product. The end result? GSK Canada was fined 51 Million CAD. This was decided at the end of May '08.

Interesting notes on the case seem to revolve around every one of GSK's arguments being rejected because of the precident that they would set (exclusive markets, parent controlled purchase lists...) What really struck me as astounding about the notes I read on the case was that the case focused on transactions durring the years between 1990 and 1993.

1993? That was 15 years ago! Most of you, as I know it, hadn't started your careers yet, and if you had you had just started. I'm not saying that GSK's claims were remotely defensable, parsing words and obscuring definitions, but how on Earth is light shed on a single set of transactions that happened 15 years ago?

Moreover, hasn't GSK had enough? I'll bet their lesson is well learned from the 2006 decision against them, and while that doesn't repay other evaded taxes I'm guessing they will be a little more giving to their local tax authorities in the future.

I hope all's well, and enjoy the holiday!

Mike