Throughout the fall, Pfizer, the maker of Viagra, has been courting Allergan, the manufacturer of Botox. Pfizer was not attracted by Allergan’s wrinkle-free face or full lips, but by its Irish “citizenship.”
In its proposal to Allergan, the Viagra-maker whispered, “If we get together, we can really stiff the tax man.” In order to fulfill this goal, Pfizer would renounce its U.S. incorporation and take on Allergan’s Irish registration. Add into the mix the fact that most of Allergan’s employees continue to work in the U.S. (where two-thirds of the company’s sales take place) and Pfizer’s executives would continue to operate out of New York, and the union becomes very questionable. But when tax time comes, both would proudly declare with a straight face, “We’re Irish,” making much of their combined income off-limits to U.S. tax collectors.
Pfizer is far from the first major U.S. firm to undertake this tax dodge in an attempt to avoid its responsibility to pay taxes. Since the 1980s, more than 50 U.S. multinational firms have executed the maneuver, known as a corporate inversion.