A Senate Finance report says AbbVie shifted profits overseas to reduce taxes

A sign stands outside an Abbvie facility in Cambridge, Massachusetts, U.S., May 20, 2021. REUTERS/Brian Snyder/File Photo

July 7 (Reuters) – Drugmaker AbbVie Inc makes most of its sales in the United States while shifting most of its profits overseas to avoid U.S. taxes, an interim report by the Senate Finance Committee said on Thursday.

According to a Democratic staff report, more than 75% of Illinois-based AbbVie’s sales are made in the United States, while only 1% of revenue is reported in the home country for tax purposes.

This is a long-term trend for the company. In 2018, Reuters reported that AbbVie reported its income in lower tax jurisdictions, which was possible in part because the company parked most of the patents for its best-selling drug, the rheumatoid arthritis drug Humira, in the tax haven of Bermuda.

A report by the Senate Finance Committee said profit shifting has resulted in “startlingly low effective tax rates” for the drugmaker in recent years: 8.7% in 2018, 8.6% in 2019 and 11.2% in 2020. The current corporate tax rate in the US is 21%.

The report proposed reforms to the US tax code to address the issue, including raising taxes on certain income earned abroad and fixing loopholes that encourage offshoring.

AbbVie did not respond to a request for comment.

Reporting by Michael Erman Editing by Bill Berkrot

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