Teva Faces Israeli Back-tax Claim
Israel’s tax authority is seeking to recover $271 million in retroactive tax for 2014-2015 from drugmaker Teva, reports said. The newspaper Calcalist said Teva, one of the country’s largest employers, has been afforded a privileged status in Israel for years and paid no tax at all in the decade preceding 2014.
Though public protest ended that status, the paper said the company has continued to benefit from a lower corporate tax rate, thanks to legislation aimed at boosting capital investment in Israel.
The newspaper Calcalist said Teva, one of the country’s largest employers, has been afforded a privileged status in Israel for years. It paid no at all for the decade preceding 2014. Though public protest ended that status, the paper said the company has continued to benefit from a lower corporate tax rate, thanks to legislation aimed at boosting capital investment in Israel.
Calcalist said Teva would have to appeal to an Israeli court to avoid paying the outstanding tax bill if authorities demanded it. This would hit the company hard in the midst of an ongoing $3 billion restructuring and debt reduction plan triggered by the overly expensive acquisition of generics drugmaker Allergan.
At the end of 2017, Teva’s new CEO, Kare Schulz, announced plans to slash 14,000 jobs, about a quarter of its workforce by the end of 2019, The company later modified the cuts downward slightly.
Separately, former Teva chairman Philip Frost has agreed to settle stock “pump-and-dump” charges with the US Securities and Exchange Commission (SEC). He will pay $5.5 million, without admitting or denying the allegations. Frost’s Miami-based biopharmaceutical and diagnostic company, Opko Health, will pay a $100,000 fine.
Frost was one of 10 people and Opko one of 10 related companies that were charged by the SEC in September 2018 over schemes in which the stock market authority said they manipulated three companies’ stock prices from 2013 to 2018 and reaped $27 million in proceeds.
According to the SEC the Israeli executive was implicated in two schemes, which involved consumer health specialist Biozone Pharmaceuticals, acquired by Cocrystal Pharma in a 2014 reverse merger, and cancer biotech MabVax Therapeutics.
Frost, whom the SEC described as “a successful biotech investor,” was a longtime chairman and CEO of Ivax before selling it to Teva for $7.4 billion in 2005. He has been CEO and chairman of Opko since March 2007 and will remain in the job, though restricted from trading penny stocks.