China Says GSK Evaded $16M in Taxes
A Chinese state-run newspaper has accused drugmaker GlaxoSmithKline of evading at least $16.04 million in taxes.
The Legal Daily newspaper, run by the ruling Chinese Communist Party's Political and Legal Committee, reported last week that GSK intentionally imported its HIV-treatment Lamivudine at an elevated cost. Along with using tax loopholes for charitable donations, this helped GSK avoid millions in import value-added tax and corporate income tax.
According to Reuters, reputable sources have said that Chinese authorities may be looking to charge the company itself, which could put the drugmakers license to operate in China at risk.
Also last week, Chinese police charged Mark Reilly, the former British boss of GSK's China business, and other colleagues with corruption, after a 10-month probe found the firm channeled nearly $500 million in bribes through a network of travel agencies to government officials, hospitals and doctors.
Read the Reuters press release