Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) will pay the Israel Tax Authority $750 million to resolve all pending litigation on taxes payable by the company for taxable years 2008-2020. Under the terms of the agreement the company will pay in installments between 2024 and 2029.
Teva reported that the amount includes $500 million in corporation tax on historical profits, which the company saw as exempt as part of the Law for the Encouragement of Capital Investment. The company will pay an additional $250 million in corporation tax that was disputed.
Under the terms of the agreement, it was further agreed that in the future event Teva pays dividends on, or repurchases, its equity interests, it will pay an additional 5%-7% of the amount of such dividends or repurchases in corporate taxes, up to a maximum tax payment amount of approximately $500 million.
Teva said, "This allows Teva to end this historical income tax issue, and to continue to focus on its commitment to the health of patients and on the continued implementation of its "Pivot to Growth" strategy."
Teva has 37,000 employees and operates in 58 countries. Teva said, "As a global Israeli company, with its headquarters based in Israel, Teva is deeply committed to the State of Israel and the Israeli ecosystem and is proud of its contribution and role in the country's economy."
Teva said that the settlement would not affect its 2024 forecast. Teva's share price has risen 58% since the start of 2024, giving the company a market cap of $18.92 billion.
Published by Globes, Israel business news - en.globes.co.il - on June 25, 2024.
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